Wednesday , 23 August 2017


Ian Campbell's Commentary: Canada's Many Economic Advantages Make it #1 – Here's Why

Canada’s  size, political structure and culture will enable it to – properly governed – be more resilient to world economic problems than any other developed country. [For one thing] we don’t have the extent of political polarization that… [is currently the case] in Washington…and now exacerbated to new levels in these difficult economic times – and that will, in my view, cause the U.S. to continue down an increasingly rocky economic road. [Below I put forth Canada’s economic advantages and disadvantages.] Words: 1026

So says Ian R. Campbell, FCA, FCBV (stockresearchportal.com/) in Today’s Economic & Resource Stocks Commentary* which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited ([  ]), abridged (…) and reformatted below  for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included so as to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.

Campbell goes on to say, in part:

This past week Canada’s Prime Minister, Stephen Harper, gave a speech in New York, where Mr. Harper apparently said that the Canadian economy, being export-driven, is “very vulnerable” – which of course it is – and that Canada’s export market is its biggest challenge. 

Mr. Harper also is reported as saying (among other things) that:

  • while Canada currently is running a deficit, it does not have a sovereign debt issue, nor is its deficit “structural or protracted”;
  • Canada is America’s largest and friendliest trading partner, and largest energy supplier; and,
  • Canadian energy exports offer America its most reliable supply of oil where that oil supply is “based on market principles rather than strategic objectives”.

I premise the following by making it clear I am a Canadian who has lived my entire lifetime in Southern Ontario – Canada’s most central and populated province.  That said, and with my most objective hat on, I see Canada as having a number of advantages in the current economic environment that in combination I believe no other country has:

  • Canadians are comparatively few in number (approximately 33 million) occupying a vast and resource rich geography;
  • We have a parliamentary democratic political system, which to some degree ensures compromise when Canadians elect a minority Federal Government.  Thus, in Ottawa (our Nation’s Capital), we never have the extent of political polarization that we have seen in Washington as long as I remember, and now exacerbated ‘to new levels’ in difficult economic times – and that in my view will cause the U.S. to continue down an increasingly rocky economic road;
  • Most importantly, in my view, our best friend is the biggest ‘big brother’ in the world’s ‘schoolyard’.  This enables Canadians to enjoy social programs and a standard of living that would otherwise be unavailable to us, as a result (for example) of Canada not having to spend on military to the same comparative degree as many other developed countries;
  • In the current economic environment we have just elected a majority federal government.  This means that for the next 4.5 years we are assured as Canadians that important federal legislation will be passed without stalemate when decisive action may be required in unsettled world and unsettled country-specific economic times; and,
  • Canada has gun control laws, and while Canada is a proponent of ‘free speech’, we do not take ‘free speech’ to the extreme our American friends do.  For example, I absolutely believe a religious leader in Canada with a following of 60 people who announced he was going to ‘burn a Koran’ would have been immediately shut down, as would any other similar racial or religious public bigotry.

That is not to say the Canada does not have potential economic problems on our horizon, including:

  • its share of debt problems at our federal, provincial and municipal levels;
  • particularly in our provinces of Ontario and Quebec, an ‘integration dependence’ with U.S. manufacturing operations that could be seriously impacted (or so I think) by U.S. return to technical recession and increased trade protectionism;
  • particularly in our province of British Columbia a ‘lumber industry’ that is dependent to some degree on U.S. construction activity and tariff rates;
  • what I think could prove to be a ‘housing price bubble’, particularly in our larger population centers, which has not really abated after 2007; and,
  • what I see as ‘still there’ but quite diminished French/English issues;

That said, while I do believe that Canada absolutely will face serious economic issues going forward, [as I said in the opening paragraph,] Canada’s size, political structure, and culture will enable it to – properly governed – be more resilient to world economic problems than any other developed country – with, I think, Australia and New Zealand being #2 and #3, respectively – as things move forward.

I will be very interested in your views on this commentary.  As usual, disagreements are more to my liking than agreements, and I promise I will publish any disagreements that are balanced in these e-mails.  Please write to me at icampbell@srddi.com.

*http://www.stockresearchportal.com/commentary/country-risk-pm-harper-canadian-economy-the-eurozone?TabId=1

Ian R. Campbell About Ian R. Campbell
Ian R. Campbell, FCA, FCBV, is a recognized Canadian business valuation authority who shares his perspective about the economy, mining and the oil & gas industry on each trading day. Ian is also the founder of Stock Research Portal, which provides stock market data, analysis and research on over 1,600 Mining, Oil and Gas Companies listed on the Toronto and Venture Exchanges. Ian can be contacted at icampbell@srddi.com

Other Commentary by Ian Campbell:

1.  Ian Campbell’s Commentary: More on Gold!

I read an article yesterday about the price of physical gold…that I think is worth bringing to your attention [not only because of what was conveyed but who was the source of the comments made and the great credibility of those comments given his] immediate access… to people he knows in high-level positions [and] can, and no doubt does, interact and share views with on a daily basis. [Let me explain more fully.] Words: 840

Is physical gold the best available ‘safe-haven’ or is it the U.S. dollar – or perhaps even U.S. Treasuries? Words: 793