Conrad Black urges Canada to harness its vast natural wealth for economic growth

Commentary

Recent developments suggest that Canada and the United States are likely to experience a soft landing, avoiding a recession. It also appears that the worst of inflation is behind us, with rates coming down to manageable levels. However, it’s important to acknowledge that the handling of the COVID pandemic led to a deep recession, causing significant psychological, economic, and educational disruptions. This recession was essentially a gift to China, the source of the pandemic, which profited from it despite stringent containment measures within its borders. While inflation rates have decreased significantly, the rapid spike in inflation over the past five years was unnecessary.

Considering the significant economic and societal damage caused by the pandemic, and the subsequent reduction in inflation, avoiding a severe recession may not be considered a remarkable achievement. Historically, major economies have aimed to prevent depressions by increasing the money supply. In the past, societies endured deflation periods without major issues, and savings retained their value. However, with the onset of the Great Depression, countries abandoned the gold standard and opted for continuous money supply expansion to combat poverty and unemployment. This led to the acceptance of moderate inflation as the norm, creating potential long-term challenges.

Canada has the potential to adopt a unique fiscal and monetary policy approach due to its abundant natural resources. By linking the Canadian dollar to a combination of gold, oil, and essential food items, the country could establish a disciplined currency system that incentivizes investment within Canada. Such a strategy, coupled with tax incentives for domestic investment, could fuel economic growth, strengthen the currency, and enhance Canada’s global influence.

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In the last nine years, approximately $300 billion more has been generated in this country, and been spent or invested outside this country, than the amount of money that has been attracted to Canada for investment purposes. This trend could jeopardize Canada’s standing among the world’s most prosperous nations if it continues unchecked.

Instead of solely focusing on avoiding a recession and reducing inflation rates, policymakers should be alarmed by the significant gap in per capita standard of living between Canada and the United States. Without a shift in fiscal strategy and leveraging our natural resources, Canada risks falling behind economically.

Since Confederation in 1867, Canada has historically matched America’s population growth and economic progress. However, in recent years, Canada has failed to keep pace with the United States in terms of economic growth and per capita income. It’s crucial for Canada to prioritize fiscal discipline and capitalize on its natural resources to avoid becoming economically stagnant.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

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