Canada’s new economic reality

 

As Canada emerges from the Dark Decade, we need to get back on track with a modern economy.

The Harper government’s plan to make Canada an “energy superpower” was a disaster for a number of reasons. The plan reversed our progress as an industrial nation; it insured that Canadians would become the highest per capita emitters of CO2; it failed to anticipate the vagaries commodity markets.

lumberjack

As long as we are hewers of wood and drawers of oil, we are just a colony of economic powerhouses. Mel Watkins identified this failed strategy as the “staples trap” in 1963.

“The tendency for the country to tilt its economic resources and policies in support of one particularly in-demand staple or another that, inevitably, leaves the economy struggling when the staple falls out of favour (David Parkinson, Globe and Mail, July 2, 2016).”

Watkins, now 84, looks back on the Dark Decade: “We bet the farm on oil prices staying high and rising, but that hasn’t happened and, it would seem, is unlikely to in any near future. We need to go back to the 1970s when there was genuine debate in Canada about industrial policy transcending staples.”

Back then, after World War II, Canada had shifted its workforce from agriculture to factories. By 1999, the high-value sectors of automotive, aerospace, transportation, electronics and consumer goods employed 60 per cent of the workforce. At the same time, the resource-sectors of agriculture, energy mining and forestry together only employed one-quarter.

What seduced Canada back into the staples trap? In a word: globalization. We gleefully sent manufacturing jobs to low wage countries with low environmental standards. Exports of metal ores doubled since 2000. Energy exports increased by 55 per cent at the same time as auto exports fell by 11 per cent. Economist Jim Stanford sums it up:

“The global commodities boom shifted Capital and policy attention towards extractive industries. Canada’s economy has been moving down, rather than up, the economic value chain.”

We’ve these cycles before where expansion in one part of the world triggers a global commodities boom. This time it was the modernization of China that triggered the boom. In the past it was the reconstruction of Europe and Japan after the war, and before that it was the rise of the U.S. as an industrial power.

Parkinson looks to future: “For the oil and gas business, the long term prospects look even more grim. The growing global momentum for green energy looks poised to steadily erode demand for fossil fuels over the coming decades. We may one day look back on the oil-price collapse of 21014-15 as the beginning of the end for the industry.”

During the Dark Decade, Canada invested heavily, not only in political resolve to exploit the dirty tar sands, but in the human and financial capital needed to dig the stuff up. It will take time to shift gears but Canada must shed its colonial mentality. It’s happening. Enbridge has invested $1 billion in wind-energy. Alberta has budgeted $3.4 billion for renewable energy.

B.C.’s government still has grandiose dreams of a fossil-fuel economy with liquefied natural gas. While Premier Clark hasn’t yet admitted it, that plan is history.

Phone privacy left unresolved

It’s too bad the court case of the FBI versus Apple didn’t proceed. If it had, the issue of whether phone companies must aid police by releasing private information might be resolved.

FBI new app

The case won’t go to court because the FBI says that they don’t need the cooperation of Apple because they can hack into the phone after all. That presents another problem: if the FBI can hack into anyone’s phone, they should pass on the vulnerability to Apple so it can be fixed.

I’m not a defender of corporations but I was pleased when Apple’s Tim Cook stood up to the FBI. The FBI had obtained a court order requiring Apple to bypass the security lock on an iPhone belonging to a shooter in the San Bernardino terrorist attack.

“The founding fathers would be appalled,” said a righteous Tim Cook. That’s perhaps a little more dramatic than I would have put it but I agree with the sentiment. Phone providers hold our security in their hands. There is an implied, if not explicit, contract between phone companies and customers that privacy should not be breached except in an imminent threat.

Unlike the high-profile FBI case, there was barely a whisper when a similar case occurred in Canada in 2013. That’s when rumours of a video surfaced showing former mayor Rob Ford smoking crack cocaine. Police requested a search warrant for a phone belonging to Ford’s driver and it was granted.

When investigators discovered that the driver’s phone was locked with a password, they went back to the court for an “assistance order,” similar to the one in the U.S., that would require Apple to provide assistance in bypassing the password. And without a fuss, Apple did.

Both cases leave the privacy of phone users unresolved; in the Canadian case because the judge didn’t give reasons for his decision and in the U.S. case because it never went to trial.

The Canadian judge was following a trend common in the Dark Decade when invasion of privacy was virtually government policy. The federal Office of the Privacy Commissioner found that in 2014, police made 1.2 million requests to phone companies according to CBC.

Thankfully, things have changed in Canada when the Supreme Court ruled that police must obtain a search warrant before phone companies hand over personal information. Before the ruling, Police would approach companies with computer IP addresses that were linked to criminal activity or were suspicious, and receive the name, address or phone number of the person associated with that computer address.

The RCMP now hope that the Liberal government will write laws that will allow them access to private information without a warrant. “Kids could be exposed to the hands of a predator longer, before we’re able to intervene,” RCMP Assistant Commissioner Joe Oliver, told Global News.

While everyone wants to protect our kids, the police have a habit of collecting much more information than is necessary. That makes us vulnerable to mistakes. It would allow police to go on fishing expeditions: to gather search history, record of dissent and other personal facts and to store that information without anyone ever knowing about it.