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Canada's
Troubled Economy
by
Neil Earle
Why do unemployment, high deficits and a lagging sense of confidence plague
the nation once regarded as a "solution looking for a problem"?
W
HAT IS
happening
in the country
once prized as a
beckoning treasure
trove of almost limitless
opportunity, especially for
youth?
Why is Canada still experi–
encing the effects of the Great
Recession of 1982?
How will the United States be
affected by the economic condi–
tions of its neighbor to the
north?
A New Government
Canada's new Conservative gov–
ernment has made the economy its
number one priority. Andas Prime
Minister Brian Mulroney picked
up the reins of power, he received
sorne good news.
Ontario- the province that is
Canada's economic engine-is
showing renewed signs of vigor and
confidence. The provincial growth
rate could hit 5 percent this year.
Moreover, the spillover effects of
the booming U.S. economy are
finally being felt.
Many segments of tbe prívate
sector are still concerned about
how salid the recovery will be. For
instance, the construction, engi–
neering and finance industries are
not yet·, at least, sharing in the
boom. And it could be quite a while
befare a serious dent is made in
Canada's high- more than 11 per–
cent- rate of unemp1oyment.
Februar y 1985
But why the lingering doubts
about Canada's future?
Finance Minister Michael Wil–
son recently observed: "One
hundred years Canada lived on its
resources. For the past 1
O
years
it
has 1ived on credit. Now it must
live on
its wits
and its intelli–
gence."
Let's see how it all hap–
pened.
A Sudden Change
At the end of World War II
Canada found herself temporari–
ly the world's
third most impor–
tant country!
With European and Japanese
industry devastated, Canada's
ample reserves of wheat and
minerals--especially the strate–
gic reserves of oi1, iron ore,
uranium, aluminum and hydro-
rich uranium strikes in her ancient
treasure chest, the Canadian
Shield, while Kitimat , British
Columbia, was host to one of the
wor1d's largest hydroelectric plants
for tbe aluminum industry.
electricity- not to mention her Brian Mulroney became Canada's Prime
booming population, propelled Minister in landslide vote last year.
Canada to a peak of world
inftuence exceeded only by the
United States and Soviet Russia.
Those were heady days. Popula–
tion soared from 11,500,000 in
194t to 17,000,000 by 1958. The
value of Canadian wheat exports
more than doubled. Mineral pro–
duction jumped nearly fourfo1d.
Manufacturing output tripled! Im–
perial Oil 's "blow in" of a new
well at Leduc, Alberta, in 1947
kept pace with one of the world's
largest iron-ore finds near the
Q u ebec-Labrador border 1n
1948.
Ontario hummed with news of
Even the mild post-Korean War
recession of 1953-54 couldn' t halt
the seeming headlong rush of the
Canadian economy.
Yet, by 1958, a full-scale reces–
sion raged.
What was happening?
An lnterdependent World
Part of the problem, of course, was
the familiar
boom-bust cycle
of the
free-enterprise system.
Canada's remarkable growth in
the 1950s concealed basic structur–
al ftaws. Her resource boom pushed
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