Canada didn't forget anything. We have a diverse economy with common sense measures like reducing our net debt to GDP, while keeping a fully funded retirement pension fund (CPP, unlike SS, actually invests in the public market).
Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system.
No rational economist can look at the situation in Canada and say that "Canada forgot to plan for its future by leaning on oil and the loonie" it's a ridiculous statement.
Criticizing Canada's action on climate change is warranted, but our federal economic policy has been quite level headed.
I'd argue Canada made concerted efforts to support natural resource industries at the cost of all other industries. Eg. expending massive political capital with the US to push for Keystone XL. We've hurt our image abroad by fighting climate change action, Canada even refused to consider asbestos a hazardous material because there's a single asbestos mine in the country. As soon as that mine closed we switched to considering it hazardous. These are short termed, unprincipled policy decisions that help the resource industry at the expense of the Canadian brand.
Canada has been doing that since it's inception... the first industry in this country was natural resources and since that time it has remained our strongest.
Even the way we do provincial transfer payments is sane. While one
industry is booming (Oil, manufacturing, tech) other "have not"
provinces get payments through the federal government. This brings
a measure of stability to the system.
Yes and no, the resource-heavy provinces have been working hard for natural-resource carve-outs and natural resource revenues get a 50% haircut going in anyway.
Any rational economist can say that Canada went all-in on oil because that is exactly what it did. A prolonged stretch of an inflated loonie has resulted in a long-term reduction in manufacturing capacity which means that the country is not poised to take proper advantage of the decline in the dollar that has now occurred. Instead there will be a ramping-up period where productivity is lost.
"Canada went all-in on oil" implies Canada had a choice. When the global price of a commodity you have massive reserves of spikes, what else do you do besides sell as much of it as you can?
Plan for the future by not leaning into the upswing of a boom and bust cycle. Governments encouraged more development, accentuating the cycle.
Governments could also have established rainy day funds. Alberta has one, but they haven't added anything to it since 1987. Canada as a whole has none (this is somewhat reasonable, as the federal government doesn't have jurisdiction over natural resources)
>Plan for the future by not leaning into the upswing of a boom and bust cycle.
I disagree. The upswing of the commodity cycle is precisely when you sell. Who knows, maybe oil is obsolete in 10 years. Then we're sitting on a pile of worthless gunk. Get your money when the gettin' is good.
I would agree with you, if the country had been saving any of it. As we currently ran things, the oil sales crowded out other sectors via currency appreciation for no long run gain.
That's environmental concerns aside. There are pretty good global and domestic reasons for leaving the most marginal bits of the gunk in the ground. And leaning into the cycle develops precisely those marginal sources that were most polluting or least profitable.
You can choose to sell less of the asset but you can also quite simply buy up massive amounts of reserves in a different currency. The CAD's value relative to the USD was motivated by the need to buy CAD in order to purchase the oil. This can be offset by using the royalties, and more, to buy up USD-denominated assets to balance the demand and lower the relative value of the CAD.
As an example, there is a reason that the Chinese government his such a prolific purchaser of US treasuries, and it is not because they are particularly bullish on the US.
Look at the allocation of value on the stock market. Overwhelmingly oil and gas despite that being a rather small part of the economy.
Look at the allocation of most mutual funds that a Canadian owns as part of their retirement portfolio.
Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector.
That's because all of our non-resource companies are either:
1. American / international subsidiaries.
2. Mid-sized CCPCs.
3. Owned by private equity firms.
I agree that Canadians do not allocate their retirement savings correctly and that our stock market is not a reflection of our economy, but our government has common sense measures to support a variety of industries.
The gov't was giving preferential tax treatment to resource extraction and deliberately dismantling the regulatory environment around them. Basically extending what the Alberta provincial gov't has done for decades out to the rest of the country.
A high dollar also favoured those industries against all others. Not sure if the feds could have done anything about the high dollar, but it certainly choked everywhere outside of the resource sector.
A low dollar combined with high investment in education makes Canada a good place to invest to get high skilled talent cheaper. Many American tech companies did this around 15 years ago, I worked for a couple -- marketing/sales HQ'd in the US, engineering talent in the GTA.
> Look at the nature of the previous gov'ts budgetary and economic planning (in as much as they did that kind of thing). Overwhelmingly in favour of the resource sector.
You seem quite married to this simplistic thesis that oil is Canada's downfall, but "just look" isn't an argument. I looked, and the non-oil economic output continued to grow through the oil boom, just not as fast as the oil and gas sector. Yes, oil was a temporary boost, but the country isn't any worse off than if it hadn't extracted that oil. By the way, the government does not enforce oil production quotas in Canada. The fact that the world oil price soared above $100USD causing massive production increases in Canada was not an economic policy of the Canadian government. That's the market economy functioning, not central planning as you imply. The government didn't peg the CAD to world oil prices, the international currency markets did. NOT producing oil in the highest price environment in the history of the world would have been an economic loss for Canada.
Furthermore, the last government, like the current one and every Canadian government in living memory, gave billions in handouts to every sector of the economy, especially manufacturing. The federal government spent billions balling out the US automakers in Canada. Yet manufacturing has been declining since the 1990s, long before the current oil boom. Have you seen a chart of labour productivity in Canada vs. the US and Mexico over the last 20 years? We're a high-cost low-productivity environment and not just because of a high dollar. Having actual social security programs and higher unionization rates places a big, structural role in failing to attract and retain manufacturing capacity within NAFTA.
It's puzzling that you think the oil production boom in Canada was caused by the Canadian government when production was booming in every petroleum producing country in the world because of high global demand. It's even more puzzling that you think the oil boom of the last 10 years and the supposed policies of the last federal government account for global macroeconomic trends that have existed for 20-30 years.
No I don't think the gov't caused the oil boom, or high oil prices or high oil production -- you have created a straw man to rail against.
But from their words -- openly lambasting Ontario and Quebec and their provincial gov'ts -- as well as actions they showed a disregard for diversification. Instead of investing money in infrastructure which would increase manufacturing sector effectiveness, they cut gov't revenue significantly, rolled out a variety of boutique tax cuts, and where they did spend money significantly it was in their own ridings. The disparity in the amount of highway construction in Alberta vs. Ontario for example is pretty staggering. And the only two places to see subway construction in Ontario were in Tory ridings -- Vaughan and Eglinton-Lawrence.
You're entitled to your opinion of the Harper government, but Canada isn't a centrally planned economy, and the Prime Minister's comments don't play a role in capital allocation in the economy. You're pointing at a handful of politically charged decisions that play a vanishingly small role in the performance of the overall economy today. Besides, your statements are inaccurate. The Harper government spent more on municipal public transit than every other federal government in history combined. The Eglinton subway you cite isn't even funded by the federal government, it's funded by the Ontario government you claim Harper hated. You missed the Scarborough subway which runs entirely through Liberal ridings. Public transportation is a provincial responsibility and the Harper government was the first federal government to invest in it substantially, doling out billions for subways in Vancouver and Toronto and the Toronto government's SmartTrack program. I hope you realize the entire existing Toronto subway system was built without federal funding.
I don't really want to defend the Harper government's track record on transportation, because I don't think they did enough, but trying to say that Canada lacks economic diversification because Harper didn't build enough subways is just ludicrous.
Government program spending both in real $ and as a percentage of GDP are higher today than when Harper took office, although they've declined from the peak of the 2008 recession and stimulus program. Direct program expenditure by the federal government was 12.8% of GDP in 2005-06 and 12.9% in 2014-15. Cutting taxes doesn't mean cutting spending, if the economy is growing. The biggest cuts to government spending occurred during the 1990s as part of Chretien's deficit elimination program. Spending has only now recovered to the level of the mid-90s. This is all shown in Finance Canada's fiscal tables. I suggest you examine the numbers yourself rather than relying on newspaper editorials that cherry-pick examples.
"If the Canadian government is serious about long-term growth, it must focus on how it can build cities and policies that attract people and businesses. But we have not been headed in the right direction on this front."
YES!
I live in Quebec city and there is a rampant idea in the population that the status quo is the only way forward. More petroleum exploration, larger highways, big government mining investments/subsidies initiative like 'plan Nord', big fat houses in the suburbs that you can spin after 2 years for 20% gain... we never allow ourselves to think outside the box.
I'm glad the US is 'embracing' successes like Space X, Tesla, Uber, AirBnb, ... to really show us what innovation looks like. You CANT innovate if your mind live in the status quo.
With the $CAD drop and the rise of remote work we should also expect a massive brain drain... although it's anecdotal, my brother just accepted a job (remote from Quebec) for a US-based company at double the salary he would have got from a local one. That can't be good for locally-made innovation.
Je ne crois pas que ce soit un problème isolé au Québec. Il me semble qu'après un certain âge, la plupart des gens réagissent moins bien au changement. Cela dit, je partage ton sentiment. Peut-être cette mentalité nous quittera-t-elle avec les Baby Boomers.
Pour être plus positif: connais-tu le secteur aérospatial de Montréal? C'est une partie importante de l'économie qui est souvent méconnue (manifeste dans la réaction vis-à-vis l'aide d'un milliard de $ offerte à Bombardier).
http://www.aeromontreal.ca/sector-aerospace/
Agreed with the harm to locally-made innovation. In my city (Fredericton, NB) the tech industry has hade (seemingly) more and more bigger companies (Raytheon, Siemens, Salesforce, IBM) setting up shop and bringing better wages. It's a double-edged sword. We have a pretty interesting startup scene, but those smaller companies (startups and consultants) are now finding it harder to compete with the salaries and benefits the large companies can offer.
That's the only way to really drive salaries up though. Which is the only way to retain talent when it is so easy to cross the border and start making a whole lot more.
I've been saying this to my circle of friends and family for years. The stark contrast between Toronto and Silicon Valley is mind-numbing. And the short-sightedness of our politicians and society is infuriating. I cannot understand why people think it's ok to rely on banks, resource companies, and manufacturing to hold up our economy. We need to invest in growth sectors. It may not create a ton of jobs immediately, but the potential payoff could save us. If you're not growing, you're dying.
I'm reaching the point where I need to hire developers soon. I'm worried about what kind of talent I'll be able to find, simply because most people worth their salt are already employed, or work in the Bay.
Remote is an option of course, but it adds a lot of complexity that most early-stage startups can't manage well.
You do know that tech centers in the US are outliers and general policy in the US is basically the same as Canada, and other countries that have a large mass of natural resources, Australia for example.
Mass exploitation of every resource in reach will make us rich. Or, to put it another way 'Drill baby drill.'
Silicon Valley and those that think it's different live in a little bubble that doesn't reflect the way the rest of the country thinks or acts. So moving to Silicon Valley because you don't like the short sighted drain every resource because it's cheap right now line of thinking won't be an act to change any of that, it will just let you ignore that it's happening.
100% agreed. But that insulated bubble is tremendously helpful for growing from a little shitstorm of a startup into something potentially world-changing.
Your odds are vanishingly low when it comes to succeeding in a startup. As a founder, you should do everything you can to stack the odds in your favour.
Edit: I can't respond to your reply, so I'll do it here. It's not just about funding. It's about finding like-minded individuals that are similarly motivated. It's about finding talent. It's about culture.
I love Toronto, and I love Canada. I want to be here. But it's better in SV for tech startups.
Then stop pretending that going to Silicon Valley is part of any social views and just go with the fact that it's easier to get money thrown at you in Silicon Valley and your just feeding another problem.
To your edit:
> It's not just about funding. It's about finding like-minded individuals
That's one problem you're part of fueling. There is no reason you can't have people work remotely. You shouldn't have to go to a physical place to find like minded people. However, thanks to people looking at funding can only happen in SV, and then start-ups being somehow having such a backwards view that if you're not in the seat I can see it's to hard to work as a team, and the believe that the only place to find decent, 'like-minded' people are in SV, everyone has to go to SV to get a job.
So a little bubble ends up sucking up a whole bunch of money and being a contributor to growing social problems in both SV and where ever everyone comes from.
I love that people who don't work in tech can still afford to live in Toronto. I don't think we're doing as well as we could to combat income inequality, but I'm glad we aren't throwing billions of dollars at overinflated startups. Hell, the biggest recent Canadian startup success story is Shopify, which actually sells real products and has revenue. Not just "slap some ads on it and we'll turn a profit".
I love that people who don't work in tech can still afford to live in Toronto.
Isn't the average cost of a home nearing $1M in the GTA core? From what i've read, Toronto isn't that far behind SV when it comes to real estate price inflation.
Rents don't fully reflect current property values. Landlords that didn't buy before the current mania are banking on property value growth to get their return on investment.
> But that insulated bubble is tremendously helpful for growing from a little shitstorm of a startup into something potentially world-changing.
I think that if your main goal in your startup is to raise capital from tech investors then you are correct that SV is where you need to be.
But in terms of actually building a business in the early days where head-down heavy lifting is required, I don't really see what SV offers that Toronto or Montreal do not. There are countless brilliant people in the Canadian tech community if what you are looking for is discussion or mentorship.
>But in terms of actually building a business in the early days where head-down heavy lifting is required, I don't really see what SV offers that Toronto or Montreal do not.
A much larger labor pool. In Silicon Valley, provided you're willing to pay, you can find experts for pretty much anything computer-related. You can find people looking to work at startups, willing to put in the hours, and willing (somewhat) to defer compensation. I'm sure there are a lot of smart people in Toronto and Montreal, but tech people flock to northern California from all over the world.
Not to play second fiddle to Toronto and Vancouver, but here in Mtl we have a fairly lively startup scene and some bigger players like Ubisoft, Google, and Bombardier as well. I frequent our Montréal Python usergroup, and I'm routinely impressed by the calibre of the presentations and the work that people are showing off.[1]
If you want talent, it's certainly available, and it's cheaper than SV.
The problem is that the gov. subsidizes big, foreign companies that export most of their profits. If only this talent was invested in local companies that reinvested the profits locally.
> Montreal has a fairly decent cluster of game studios, does it not?
Yeah. I work close to Ubisoft, and there's a cluster of startups around its offices. At lunch hour, all of the local eateries are full of hacker types.
I thought banks, resource companies and actual manufacturing were usually profitable. While most tech lived on VC money, at least when you look at the Bay Area.
What am I missing here? Every time I read about this stuff I always get the impression that tech is this abstract thing that barely makes profit and lives on investments while "traditional" businesses lives on selling actual things that creates profit.
Which is why I'm neurotically nervous over an impending tech crash when the dust settles and App Startup X, Y and Z will probably never be profitable with current tech salaries.
All of those profitable companies were once unprofitable. They got their start from some sort of initial investment, whether it was investors, family, or just taking an existing profitable business and morphing it.
Most startups in the tech sector are exactly as you describe. And that's the point. Eventually, one of those startups finds something that can turn a profit. They build something that people want and are able to push on a few levers and ramp up profitability.
Apple, Google, Facebook, and many more, started out as small startups that barely made profit and lived on investments. Eventually, they got their shit together and became some of the world's largest companies. However, most startups that existed at the same time as them, heck, may have even had similar ideas as them, crashed and burned. That's the nature of venture capital. Throw a bunch of money at a bunch of ideas and see what sticks.
And if you think that's a very haphazard way of investing, you're right, it is. But as a percentage of total investments made by many funds, VC funding is a very minor portion, so they can somewhat afford to make these bets (and lose).
Yeah but usually those "traditional" business have something more concrete to invest in e.g transportation, inventory, manufacturing or buying shelf space.
I imagine if "SnapChat" blows up, they won't need to hire the engineers GameApp0, FoodApp1, CarApp2 let go.
It doesn't really need to scale like a "traditional" factory.
I get what you're saying, and I am not arguing against your points. I am just trying to get clarification if I'm worried for no reason.
The salaries are high because so many startups live on credit. Eventually they die and the supply is higher than the demand.
I wouldn't say you're worried for no reason, but software is an outlier: it requires very little equipment to build. You could literally write software anywhere in the world as long as you have a computer, and as a byproduct, an Internet connection.
If you're sufficiently motivated, you'll always be able to find work, either as an employee, or as an independent consultant.
>We need to invest in growth sectors. It may not create a ton of jobs immediately, but the potential payoff could save us. If you're not growing, you're dying.
I'm curious what these growth sectors are? Are you referring to software companies? Because though I agree that's a growth sector, it's hard for me to envision how many jobs that creates in the long run. Wouldn't it create the same problems as manufacturing, i.e. it's cheaper to outsource or automate so its job pool will shrink over time? Resources and manufacturing are real, tangible things that have real tangible value. Services, though the natural growth of an economy it seems, are fleeting and easy to do without when things go wrong.
I agree that we can't lean and need to encourage a diverse economy, but I would also argue that investment in any area is a gamble, and gambling is hard for a government to do when under constant public scrutiny.
Personally, as invested as I am in the software space, I think Canada should not invest in software technology, at least not exclusively. It's cheap enough that we could still encourage it.
I was doing my Masters in Medical Imaging at the University of Toronto (did not complete). The number of talented students and professors that I interacted with on a regular basis was astounding. And they were working on really amazing things.
Here's a group of potentially 100s of well-educated students that came out of the Canadian education system, so our tax dollars went towards a lot of their training. And once they're done their PhD, they're stuck trying to compete for very limited faculty positions, or finding a post-doc program somewhere, usually abroad.
The brain drain in biotechnology is the one we should be worrying about. We have fantastic resources available here in terms of teaching hospitals and facilities, but no one's taking advantage of it. And the space of biotechnology is so broad and unexplored, that we could be investing in a number of avenues to try to achieve something in the area.
To quote the cliched Wayne Gretzky: Skate to where the puck is going, not where it is.
Totally agree and government could have a big role here. A majority of government budget goes to healthcare; they need innovation to improve. Why not throw some money to Canadian biotech companies?
I think this is short-sighted. Either way, the technology innovation will happen, and the jobs will be lost. The question is, does the innovation happen in your country, where some of the money sticks to your "fingers" through taxes and knock-on effects in the local economy? Or does it all go to SV.
Canada already has a strong software sector and programs to support all sorts of research and development (ie - SR&ED). I can't imagine where Canada fails to nurture a software industry...
I'm a Canadian software engineer. I moved away long ago, as does anyone in the industry who realizes your pay can easily jump 50-100% just by crossing the border. Most with the talent who can leave do so, or work for a US company remotely. Very few talented engineers stay, because frankly it makes no economic sense.
So I think Canada has a long way to go before it can stop or reverse the brain drain in the software industry.
This is true and as a software developer that has made a living in Vancouver for many years I appreciate it. But when the loonie drops 30% on the usd I can understand why companies here in Canada find it harder to get graduates
> The stark contrast between Toronto and Silicon Valley is mind-numbing. And the short-sightedness of our politicians and society is infuriating.
As a Canadian in tech, moving to SV is something I regularly consider. However, the nonsense that is Bay-area politics is really off-putting. Unfortunately, the state and federal politics are hardly any better. Americans seem to hate each other.
There are many things that are attractive about the United States. The politics are definitely are not up there on my list.
(That being said, from Toronto maybe it's not such a big step down. The Rob Ford fiasco appeared to be a symptom of deeper problems.)
American expat having the same nerd shortage in Manitoba, but worse. 1 out of 100 have heard of linux, and 7 out of ten of those will wince/sneer when it's mentioned. A handful of people use Solaris or AIX (because you don't get fired for buying IBM/ORCL), but most are windows peasants trying to keep their ASP.NET skills relevant.
It seems like the effect of the low dollar is already helping the tech sectors. Companies like Shopify make their money in USD while salaries are a bargain. American companies like Amazon are expanding their offices in Toronto and Vancouver. The brain drain is real though. I feel like there's a problem when police officers make more than most software engineers.
Agreed on the brain drain. Toronto is a major (and expensive) world city. From talking with friends, 100K (Canadian, that's 70K US) is the ceiling for intermediate to senior developers. Junior devs make a lot less ... 50-60K (that's 35 to 42K US)!
That said, free healthcare counts for a lot. Also, as a dev in a Canadian tech company, you are probably not going to see as much stress and volatility as your average Silicon Valley company.
The high property prices are messing up lives of young people who don't have rich parents. In my friend circle, I can see it as a key source of strife among married couples. Buying a house ties you to a city .. even if you get a better offer some place else. I don't think real-estate is being recognized as the beast it is. The last Bank of Canada rate decrease seemed only about oil prices and oblivious to the flames in YVR and YYZ housing.
Having worked in Toronto's tech scene for almost two decades I just have a big 'meh' response to it.
I now work at Google in Kitchener, and commute from a hobby farm near Hamilton. Quality of life is outstanding. I dread ever having to work in Toronto proper again.
The startup scene in Toronto is a clique. The quality of management talent is sad. After working as employee #4 in a Toronto startup, I jumped ship to work for a late stage startup HQ'd in NYC and the contrast in their management skills and treatment of employees was night and day. Working at a 'hip' company in Toronto they expect you to feel blessed and to take intense sacrifice on their behalf just because you have the privilege of working for something that isn't a bank or insurance company. Meanwhile compensation lags significantly behind what you'd get elsewhere in NA.
And then the rest of the non-startup scene in Toronto is primarily large financial companies, and the work is soul crushingly boring.
As a Toronto-based startup founder, I'm sorry you had that experience! (Shit, how Canadian of me... Apologizing for other people)
In any event, I think for the first time there's a really good cohort of Toronto founders with American-style vision and ability to execute. I don't think we're too far from seeing a couple of unicorns in Toronto that will help to build a stronger ecosystem. And yes, where necessary that means importing American management at great expense.
Toronto has a lot going for it. It's not everyone's cup of tea, as you can attest, but I think it's as good a place as anything to do something great.
With the CAD being low there might be a window where a lot more American capital invests here. Until the price of oil climbs again.
In general it seems like VC-funded companies that go through acquisition here get a far weaker deal than similar companies in the US. And the employees a lesser share of the pie. Maybe that's changing now, but unless the capital is there to invest, I can't see how.
It's improving. The capital is there, you just have to think globally fairly quickly.
We can always whine about how things in Canada are never as good as in <x>, in this case the Valley, but overall it's actually pretty good. I guess the secret sauce is to just get on with doing what you'd do regardless of your circumstances. I personally am not motivated by whether or not I'd get a 30% boost on an eventual exit if we were in the US.
As an employee trying to pay off a mortgage and save for my kids uni, that 30% is important to _me_. So for recruiting good talent (not claiming I'm good talent, but whatever) I'd think it matters a lot.
I worked across Toronto, Markham and now in Guelph bordering on Kitchener. Just the chaos, traffic and costs alone are worth not working at Toronto. I believe that my commute mirrors yours quite a bit, since I commute from the same area.
Having said that, I have references that Wattpad in Toronto is a great place to work. I believe that every place is quite unique and there are diamonds to be found amongst the rough.
$100k CAD is not the ceiling. Far from it. I've personally extended offers for $120k, and that was for a pre-series A startup. The larger guys pay even more. First company that comes to mind, Shopify, pays up to $150k:
And it goes up from there, especially once you start looking at positions that include less sexy startups, less common technologies, or more responsibility (like being a team lead).
My data is from before Shopify's success ... I think you are right that Shopify might be helping to raise salaries (to be fair, their post says 70K to 150K). I'm curious .. the 120K offer, how experienced was the individual (in terms of years, etc.).
Just saying, average house price in Toronto is 1 million. It should not cost 10x a dev's income to buy a house in Richmond Hill. In the Bay area, total comp of 400K is not unreasonable ... that makes the 2.5 million dollar homes in MV seem reasonable ... an uncomfortable 6.25x of a dev's income.
Just putting this out there that I personally make >$120k as a developer in Ottawa, and I doubt I'm all that rare seeing as there's people at my company with a more senior job title than I have.
I don't think Shopify being in town has anything to do with that, just that the ceiling is higher than you may think.
I have no idea really, I only have my own experience to go by. But it sounds like you're really being underpaid. That's very low for a developer unless you're still in school or something. I know that I made $52k as a co-op student in 2009, for example, and I believe that was standard pay at the time.
That salary ceiling is definitely one of the reasons I left for the states. Funny thing: that article goes to pains to point out that foreign investment into Canadian housing is a big issue, and I'm now watching the Toronto market, with the depressed exchange rate and looming recession, wondering whether I should turn around and buy property as an investment. There are tricky factors surrounding when and what to buy, but it could be sound over the long term, considering that the city is a seat of power for government, finance, and healthcare.
>wondering whether I should turn around and buy property as an investment
Why would you do this? There's been nothing but talk about a housing bubble, especially in Vancouver and Toronto. This seems like the worst possible time to buy property there, especially if you take any debt to do it.
This has been the talk for many years now. I know people who have been waiting for the bubble to burst, and now have absolutely no chance of ever getting into the market.
I'm estimating since the chart isn't precise. It looks like, from 2013, the average change is:
single family home: 1.1 million --> 1.4 million = 8.37% return
condo: Hard to tell. Not as large.
Am I reading that chart right? Of course, that doesn't tell you the increase in price in existing homes. And that return rate comes with interest, fees, property taxes, maintenance and the massive downside risk if we're in a bubble.
This is a very rough calculation on my part, so let me know if it's wrong.
That said, as to the original question, which was whether someone should invest now: With the massive economic slowdown + the large drop in Calgary real estate prices, this seems like a particularly bad time to invest, even if it might theoretically have been better a few years ago.
It's not really better than the inexpensive healthcare that comes with any good job in the US. If your choice is between $70K with free healthcare, and $120K with inexpensive healthcare, I know which I would pick.
We had a gov't for 10 years full of "Calgary-school" (Canada's right-wing ultra free market economic ideologues coming out of the University of Calgary econ/poli-sci program). They were overwhelmingly driven by an oil and gas agenda. From the gov't down to mutual fund investors, everyone was treating our economy like a one-trick pony, all oil and gas.
If you listened to people talk, Alberta's oil sector was supporting the whole economy. Snarky message board comments from people from out west (where I'm from originally, BTW) making comments about Ontario being a "have-not" province being propped up by the superior entrepreneurial hard-working western oil sector.
Meanwhile through all of this as a % of GDP, exports in manufacturing were _still_ triple those of oil and gas. Ontario's beleaguered auto-sector was still the primary export in the country. Followed by agriculture and other sectors.
I said it at the time, and now it is obvious. They were lying through ideological teeth, and telling a story to the country about resource driven prosperity which was factually incorrect. And it has led to our country as a whole inheriting many of the problems Alberta as a province has been plagued with for decades: highly cyclical, with a political culture verging on corrupt, and environmentally dirty dirty dirty.
And I'm afraid the new gov't is only half-heartedly interested in remedying any of this.
Ontario and Quebec could be the "Germany of North America"; the deliberate assassination of our manufacturing and engineering sectors by everyone from federal gov't officials to fund managers has been disgusting. We have a heavy infrastructure debt, are saddled by decades of ideologically-driven mismanagement, and an ineptitude at actually getting anything done.
I'm from Quebec and I have to agree with you that it could easily be north america's Germany. There is a lot of very talented software developers in Montreal but a lot of them leave to get higher salaries or work for foreign companies that love the very low, government subsidized wages [1].
If the government invested all that money in small to middle sized local companies instead the province would be so much more prosperous. Right now, profits are our biggest export. Not only that but the government insists on propping up big, mismanaged companies like CAE and bombardier time and time again [2] instead of investing in startups.
As a non-Canadian software developer in Canada the brain-drain to the US via TN visas is strong. Most talented devs I have met in Canada are Americans that have left the US because of politics etc.
As a recent University of Waterloo grad, this has been my experience as well. I tried interviewing in Toronto/Vancouver for a while but have since given up in the Canadian job market.
Not a single company I interviewed with was willing to even come close to US salaries. Everyone I know from school who's any good at all has already left for SF/Seattle/NYC and I'll probably be joining them soon.
I'm not sure how these Canadian companies expect to retain great talent when just across the border, developers can make more money after deducting all living expenses + taxes, than the entire pre-tax salary they're offering.
It's worse in London. I seen a rant on Medium [1] about the lack of affordable talent in London and I could only think of some of the low ball offers I received which would leave me worse off than staying in the North West.
I actually get paid more here in Toronto than I could hope to get in London.
My only option for the US is H1B but I'm willing to stick around for a while and I'll consider my options when I'm Canadian.
H1-B isn't exactly the only option. For example if you get a job with the Canadian branch of a multinational US company, after a year you can transfer to their US branch with an L1 visa.
Thanks for that link, it was a good laugh. The dissonance with reality was strong there. A single look at indeed.co.uk will reveal nary a single 600£ daily rate even for senior developers. Best of luck getting a pay increase; hopefully you don't have to deal with the horror of the H1B process to get paid what should be the global rate for software developers.
I love the veiled language in that article - "a new generation of proto-programmers emerge to correct the market" - you mean you hope a bunch of cheap new blood comes in because you wont pay market rates? Yeah, ok.
I realize we're a lot better off here in Canada than in many other places around the world, but it's still baffling how ridiculously uncompetitive our salaries can be when the barrier to entry into the US is almost non-existent.
I myself moved to the Netherlands from Canada and now hire people at salaries greater than my own at our branch in the US.
I myself have no motivation to move to the USA. The increase in salary would be accompanied by a personal (stress on the personal aspect) loss in quality of life. Overall motivations for me staying in the Netherlands are cultural (the mindsets of Europeans are far closer to my own), environmental (sane cycling routes, pedestrian accessible city centers, high quality public transport), and ease of travel to a variety of interesting holiday locations. The difference between Canada and the US is not even close to the difference between Canada and the Netherlands, so you can infer my willingness to move home to small town Nova Scotia. If you cannot compete on salaries you have to compete on something else but what is that going to be? Universal health care and high quality public education are not unique to Canada and probably not the highest interest of people we are considering.
If the government invested all that money in small to middle sized local companies instead the province would be so much more prosperous.
How exactly is anyone helped by money taking a round trip through the government rather than the same thing happening through free markets? You've made the cycle slower, you've made the recipients dependent on government bureaucratic decisions (who are not well-incentivized to decide well), and have reduced incentives for efficiency. And you've gained nothing.
Don't get me wrong. Government has important roles to play in our economy and society. We need government to create basic infrastructure, create regulations encouraging public goods, provide a stable system of law, and so on. But unless you are serving some legitimate purpose, channeling daily economic activity through the government is a net loss compared to doing the same through private enterprise.
Quebec being full of people who believe that the economy should go through the government seems to be its second largest economic mistake, and one it is still making on a large scale. People like you complain about the predictable results of this mistake, but don't see that it is a mistake.
Quebec's largest mistake was, of course, Bill 101. That made your province so hostile to anglophones that 1/3 of them "voluntarily emmigrated" within a few years. (The ones I know are inclined to dispute how voluntary that emmigration was...) They took with them the headquarters of many major companies, the associated jobs, and the general economic activity that would have come from those professionals spending locally. This is why, for example, The Bank of Montreal is now headquartered in Toronto.
There is a collective blind spot in Quebec to the true cost of this for your society. Major companies need to have a stream of professionals moving to their headquarters from elsewhere because that is how you move up in the hierarchy. If you have made professionals unwilling to move to Quebec (for instance by forcing their children to receive education in a language they don't speak), companies have to choose between moving headquarters or losing their most valued employees to competitors.
It proved to be cheaper to move headquarters. And they did. Quebec's economy has never recovered from this. (Though you did adjust your ethnic ratio by enough that you nearly managed to get a 50% vote to secede in the 90s...)
"Quebec's largest mistake was, of course, Bill 101" ... I thought it was the almost won referendum that drove this exile, not Bill 101.
My impression is that if you lowered the income tax in Quebec (much higher then Ontario), most probably more professionals would be willing to work there, english or french or any other language.
I agree with your statement of "Quebec being full of people who believe that the economy should go through the government".
I moved to Montreal from Toronto because of the great urban environment which I found (and still believe to be) superior to Toronto. The rents were cheap and salaries were lower, which made me believe running a startup there would be much easier. From the outside I wondered why everyone from Toronto wasn't moving there to build companies.
But after a year living there I left - 100% due to the hostility to strictly English-speaking people.
I hoped my lack of french-speaking ability would only be a minor hurdle that I could slowly overcome as I grasped the language over the years. But every single store you go into requires that they start speaking in french first (a bylaw). I watched three major street protests while walking downtown against stores who didn't change their globally-recognized retail brand names to french versions.
Plus I felt a large cliquey nature to the Montreal tech scene. I felt like a foreigner in my own country. I was happy to go back to Toronto where multiculturalism is actually fully embraced. Where almost everyone still speaks their native language first, often remaining in cultural divided in neighbourhoods, and despite this mixing at bars and events is never an uncomfortable experience.
Quebec's greatest economic problem is their obsession with cultural homogeneity.
I am a naturalized Canadian. French is my first language, and I studied and lived in Montreal several years before moving to Toronto. I feel that Toronto, and Ontario in general, does a much better job at integrating immigrants and visible minorities, regardless of origin or native language, than Quebec. This is a huge factor if you want to attract talent in a global economy.
I've never worked in Montreal, I'm from Northern Quebec, but I got to do university in Ontario and worked ever since in Ottawa. I got a job offer for a job in Toronto, and I really like the people and how being French-Canadian didn't seem like a barrier at all. Finally I declined for various reasons.
I always thought Quebec's problem were with the it's socialist approach and how taxed Quebecers are, thus professionals flocked away, but your experience has made me realize a different reality. I guess we aren't as welcoming if you're not french ... ?
It's the small things. Imagine having to apologize in every single store that you don't speak french well, even though you start the conversation speaking english or weak french.
Or feeling the hostility of older Quebecers who think I'm just another anglophile who didn't spend the time to learn their language. I heard many people casually complain about the American kids who came to the universities and never tried to speak french.
Before arriving I heard lots of rumours about how Quebec people aren't friendly and I was quick to ignore this as a stereotype. But going to many tech events I found it difficult to network. The image that has stuck in my mind of these occasions is finding many small tightnit groups of people packed together at bars or venues, who seemed to have known each other for years, and seemingly disinterested in the people around them.
I never experienced that in Toronto or SF.
> I always thought Quebec's problem were with the it's socialist approach and how taxed Quebecers are
Bringing up Quebec in Toronto (which came up often moving there) the first thing people talk about is the people's attitudes, not socalism. I've actually never heard people talk about their socialist tendencies outside of the news. The only political stereotype that came up was that the tendency of Quebec people to complain about the government not giving them enough money/support, while simultaneously not contributing as much as Ontario economically.
Out of curiosity, when did you move away from Montréal? I would have agreed with you a few years ago, but things seem to have improved for anglophones as of late.
I've noticed much less awkwardness and resentment when people are faced with non-French speakers in general - both in stores and with regular people. I'm not sure about how things are in the workplace these days, though.
My marginal tax rate in NYC is not too far off from what it would be in Québec. My income as a not-quite-senior software engineer, however, is ~3.5x higher. Taxes would have to go down below zero for a move to make sense financially.
That said, Montréal is a great city and I'm actually considering moving back, despite the dramatic drop in income.
I thought it was the almost won referendum that drove this exile, not Bill 101.
Nope. The almost won referendum was in 1995. The referendum that wasn't close was 1980. Bill 101 was 1977.
The Bank of Montreal announced its move in 1977.
(I'm aware of this because I had several classmates in high school whose families had moved from Quebec. They were extremely clear that they moved because of Bill 101, not because of the referendum.)
> Quebec's largest mistake was, of course, Bill 101.
No, no, Quebec's largest mistake was accepting confederation. If we'd just joined up with the Americans instead, and batter down all laws protecting our culture and laguage, we would have gotten assimilated anyway, but at least we'd have a stronger economy.
Going back farther, the USA fought a war to get you in 1812...
That said it is worth reflecting that most of the natural resources that Quebec has is on land that was added post-Confederation.
Quebec received control of that land under a number of requirements, including that they take care of the natives. The natives do not believe that this requirement has been met, which is why for example the Cree voted over 95% for seceding from Quebec if Quebec seceded from Canada, by force if necessary. While the Quebecois were mixed on whether to secede, they had very strong opinions that Quebec was an indivisible whole. Including land given post-Confederation.
It would have been interesting to see what would have happened with this land if the 1995 referendum had gone through. I'm quite sure that nobody outside of Quebec would have agreed with the reasoning that "Canada is divisible but Quebec is not". So how would Canada have handled the question of how to handle the economically valuable parts of Quebec that wanted back into Canada?
I don't think Quebec gets a free pass here. It was once the financial capital of Canada until all this separatist talk. Toronto then became the financial capital of Canada, with something like 40% of its companies HQ'd there. Montreal now has about a third of the GDP of Toronto, yet Toronto only has 1m more people!
It seems like Canada is prone to buying into extremism. Be it separatism or the recent love-affair with Putinist style economics banking soley on oil/gas and expecting there never to be a shake-up in the market when clearly the industrialized West was going full tilt into renewables.
Check the timeline. It wasn't separatism that drove companies out, it was Bill 101. (OK, Bill 101 was driven by the same motives as separatism.)
Thanks to that bill, you had a population of professionals who had moved to Montreal for good jobs who found that, because they were born in a different province, their children could not be educated in English. These professionals found it less painful to move to Toronto and find new jobs than they did to watch their children be forced into schools that didn't speak their language. Companies found that it was cheaper to relocate headquarters than to lose these employees, and this accelerated the brain drain.
Quebec continues to be hostile to anglophone immigration, but most of the damage is now done and permanent.
It's all about bilingualism. As someone who learned french from birth, I could not work in tech if I couldn't also communicate in english. That's a requirement for most jobs and I had to work really hard to get a good level of spoken english.
We have people that speak french and spanish, french and english, french and german, etc.
Bilingualism is strong here, pick it up if you want to work in the area. It's no different for people born in Québec. We learn french at home and then work really hard to learn english for work.
I am a Canadian anglophone from British Columbia with highschool French. My children have been raised in the USA with no French. It would be easier for me to take a job and move my family to The Netherlands than to Montreal. (Not a hypothetical example. I turned down an offer a few years ago at a company that wanted to hire me there. My children would have had to learn Dutch, but would have gone to school in English.)
If you are founding a company and want access to anglophone talent, would you prefer to start it in Montreal or Amsterdam? What are the economic implications of this fact for Quebec?
Quebec has made a decision to value remaining French above economic growth. That's somewhat reasonable. But if you've chosen that, you should be honest with yourselves about the choice you made. And shouldn't be puzzled that your economy has not done so well.
For a lot of people, it is more important to be strong in our values than to ignore them for the sake of the economy even if it means losing economical growth. For Québec to be strong it needs to be true to itself. Selling out our heritage for profit would be unthinkable.
You could argue that some laws make no sense and I would agree on some points but people are very afraid to lose what makes Québec what it is and some harsh measures are put in place.
As I said, the decision is somewhat justifiable. But there are plenty of comments like https://news.ycombinator.com/item?id=10888145 which show no awareness of how policy actually translated into economic effects.
I believe that you should either make the decision with full awareness of consequences, or else make the opposite decision. But don't make the decision and then be dishonest about what the consequences were.
There is a strong wish to stay true to our cultural heritage and stay true to our endangered roots as French Canadians. Québec has been fighting pressure to abandon the french language for ages. This is why we have things such as the "Loi 101" and the "Charte de la langue française". It makes sure that people can go in a coffee and order in french without any problems.
You would think this is a non-issue, why force people to speak and write french? It's easy to think that because most of the province is french business and strangers are is going to standardize to french but it's not true. Even with the laws that we have in place, there are a lot of shops or restaurants where they can only offer service in english. It's a constant uphill battle and while some laws make no sense, it's better than having no laws or regulations.
Yes, it is very hard to come and live in Québec if you are not willing to put time and effort to learn french. That's exactly the way we want it.
Sometimes the province is seen as racist and backward from the outside. The truth is that we are a very welcoming people but only to those who acknowledge and try to understand our cultural heritage and the fight that is being fought to stay true to our values despite all the pressure to change.
>Sometimes the province is seen as racist and backward from the outside. The truth is that we are a very welcoming people but only to those who acknowledge and try to understand our cultural heritage and the fight that is being fought to stay true to our values despite all the pressure to change.
This is exactly the kind of rhetoric someone from the American south would say about fighting gay marriage or keeping blacks out of their neighborhoods. Yet when it comes to the terrible policies of francophiles, we're supposed to pretend this rhetoric is valid?
That's a good story that the Fraser institute made a lot of noise about, and made a great headline but in reality Ontario was still contributing more in tax revenues and EI contributions than it got in equalization payments:
>"That's a good story that the Fraser institute made a lot of noise about"
Please avoid implying that the post you are replying to is a shill unless you have good evidence to that effect. Even well-supported ad hominiem attacks rarely discredit the substance of a post, and your ad-hominem attack is unsupported by any evidence. You also failed to reply to what the post above you actually said, which was that Ontario was doing worse now than ever before (relative to the other provinces).
In addition, I don't think this post follows the spirit of the Hacker News guidelines.
"Be civil. Don't say things you wouldn't say in a face-to-face conversation. Avoid gratuitous negativity.
When disagreeing, please reply to the argument instead of calling names."
I didn't call the poster names or disparage them in any way. I posted an editorial that cited facts pointing out the inaccuracy of the claim that Ontario is a net subsidy recipient. Ontario's net contribution in taxes and EI payments outstrips any transfer payments it receives or has received.
That I pointed out that the Fraser institute has made political hay out of the fact that Ontario has received subsidies is completely legitimate. They have been by far the organization that has boosted this line the most. They are a highly partisan ideological organization that in general gets way more uncritical press than they should.
>a story to the country about resource driven prosperity which was factually incorrect
In a way, all stories about resource driven prosperity are incorrect. Natural resources are exported and so is the wealth they bring. You never hear about the prosperity of mining towns because they never have any, and when the resources run out they don't have jobs either.
Same for countries exporting agricultural produce. They can't tarrif imports to stimulate local economic development because of WTO & IMF. Kenya will be stuck growing flowers forever!
Oil and gas, conservative but also headed by (Harper) a pretty much far right religious attitude which pushed climate change denial and also anti-science in general.
The scary part in my opinion is: "Housing is the only thing keeping the Canadian economy afloat."
This more an anecdote than an argument, but I know quite a few people who can barely pay their mortgage or have crazy margin debt (with mortgage) in Canada. I doubt their situation will get any better soon. There is this mentality around here that owning a house is a must or you are some kind of loser.
The way that housing is keeping the Canadian economy afloat is that homes have appreciated a tremendous amount over the last 10 years. In Calgary it's over 2x in 10 years or 9% per year.
In Edmonton and Calgary I can echo that there is a strong social influence in buying real estate. Owning a home is expected. With homes appreciating over 9%/year for 10 years, people assume that that will continue into the distant future.
I've seen enough agreement that I think it's worth pointing out. The dating market for men in Toronto is terrible, at least if you're not in the mainstream attractive subset: over 5'10, have all your hair, have easy social charm and confidence. I don't know exactly why this is but anecdotally women are extremely selective and have it ingrained deeply to never settle for anything (and they're not happy about not finding "good enough" men either).
I can live with lower pay but after years of nothing but female rejection I'm really tempted to run to the US just for this reason. (Again, only anecdotally, but the way I'm treated by women in social settings is night vs day anywhere but Toronto.)
I know the places you're talking about, and I can't stand them because they're dehumanizing and hypocritical. But believe me I've looked, and in my experience a disproportionate number of these men are actually from Toronto! I'm not saying men don't feel like this elsewhere, but it was surprising to me how this city sticks out.
(Edit: I don't endorse the above article, it's demeaning and ridiculous, but I'm using it as an example of how this city often comes up in "worst of" discussions.)
I was recently in Calgary. I found the people there friendly, polite and nice just like all the Canadian stereotypes suggest. I would love to live up in Canada, but HOLY HELL is it COLD! I couldnt deal with that. I was just in Calgary, I cant imagine Edmonton, Red Deer or the like. Is it just as cold on the east coast? I would imagine it has to be.
Southern Ontario where the bulk of the Canadian population lives has basically the same climate as Chicago or Detroit. It is cold in the winter and blistering hot in the summer with a 170-ish day growing season. If you don't consider those places to be brutally cold you wouldn't consider it that way here. In fact the areas on the north shore of Lake Ontario have a milder climate (due to lake effect) than those of upstate NY to the south of us.
I grew up in Alberta. It is cold and dry and has a short summer. I prefer the weather here even if the summers can be a bit too humid and hot for me.
Upstate NY here, and we get the worst weather in the US from Canadian winds and lake effect snow. For half the year it's always windy, always cold, always snowy, and always so, so gray.
But aside from that it's a great place to live. Land is cheap, you can get good local food anywhere, and we're safe from nearly every natural disaster you can think of. Just bring a jacket.
Seems like many Americans near the border have this perception as Canada being the 'source' of their cold weather.
In reality the bulk of the nastiest storms here in Ontario come over the lakes from northern Michigan, which is, yes, north of us. Look on a map, most of the heavily populated areas of Canada are as far south as northern California. The parts that are north of the 49th are much less populated.
Yes, periodically there is a nasty cold front coming down from Hudson's bay, but the prevailing winds and weather patterns are west to east. So most of our weather blows over from the midwest U.S.
The really nasty awful cold weather last year for example, hit the U.S. midwest harder and nastier first.
I see elsewhere in this thread you mention you live near Hamilton. Well, I work in Hamilton and commute from Niagara, and that puts you and I south of the following: Washington, Montana, North Dakota, Minnesota, and Maine, 2/3rds of Oregon, Idaho, South Dakota, Wisconsin, Vermont, and New Hampshire, 1/2 of Wyoming, Michigan, and New York.
If the weather's too cold, just put on better clothing and suddenly it's comfortable again.
Unlike Houston, where it's crazy hot and humid all the time, and there's nothing you can do about it except for hide inside in the air conditioning.
No, the problem with Canada recently has been that it's been too warm. It's hard to really appreciate winter if it's too warm to go skiing or skating. We got close to an inch of rain on Sunday here in Ottawa that really messed up our snow. :(
I'll take the weather in pretty much anywhere in Canada over the weather in Houston any day.
I will complain about the lack of sunshine in the wintertime here, though. That's just depressing.
As far as Canada goes, the winters in Calgary are pretty nice. I've lived in the Yukon, Nova Scotia and I grew up in the lower mainland of BC, but I'm in Calgary now and have been for a couple of years. Definitely prefer it here.
There's little snow, and we get tons of sunshine. When it does get cold, it's dry, so it doesn't feel as bad as a warmer temp on the coasts. You get reprieves in the form of chinooks too, where the temperature will jump up 20 degrees for a week or two. It's above freezing here today, but it was at -20C on Friday.
There is a tech scene here as well, and it's starting to get a bit more traction now that oil and gas aren't eating up all the brain power. Getty Images has offices here, and there are start-ups in and out of the energy industry. It'll be interesting to see what the city looks like in 10 years. Lots of folks are calling for it to be the next Detroit, but it doesn't really seem to be going that way.
The West Coast (Vancouver, Victoria, etc.) rarely falls below zero degrees Celsius. Southern Ontario gets cold but it doesn't generally get Alberta-level cold. To be honest, I would rather live in Toronto than Houston.
It's crazy and upsetting to watch Canada squander the talent its great engineering schools produce, especially given the low cost.
I left Toronto 8 years ago for the US but have close ties to home and keep regular tabs on the labour market. Even at 1:1 CAD:USD, before factoring in increased cost of living in Toronto (vs. where I am, which is not SF), I'm making close to double what I'd hope to fetch back home. If I really bust my ass and kill it where I am, the disparity is only going to grow.
Once you account for other factors like the increased cost of everything and the general rarity of high-paying tech jobs, returning to Toronto feels like too much of a risk: even if I were to strike relative "gold" and make $120k-140k+ CAD as a senior engineer (a far cry from what I get how), what happens when I move on to something else? A close, highly-talented friend of mine has one of those jobs but feels trapped and doesn't even know where else he could go.
I love that the Toronto startup scene is growing and maturing and I have friends who are really working to, but I fear what's going to happen when funding in the US begins to contract. SF, NYC, and Seattle all have profitable "anchor" employers which will continue to bid for talent even when startup funding won't sustain high tech salaries. Toronto has small branch offices of American companies and some banks (I'm skeptical about the latter). Is there much else?
As far as I can tell there just isn't as much good work. I want to go home some day, but as someone who was fortunate enough to land a good tech job in the US: returning is a massive step down in pay for: fewer choices of work, a more fleeting labour market, a less ambitious environment, an expensive city with overpriced real estate, and a public transit/commute crisis which might not get materially better before I retire. I really do love the place though.
tl;dr I'm an exceptionally fortunate Canadian spoiled by great career prospects in a major American tech hub and find it hard to justify returning home :(
Inequality really works both ways. Canada is a much better place to be if you make under 60k/year. Its also a much better place to be if you fall on the work to live side of the coin. The flip side is you'll get less aggressiveness both at the corporate and employee level and the pay to match.
I think its largely cultural. Theoretically Canada should be more welcoming to entrepreneurship. You don't have to worry about your health insurance when you quit and start your own company - and the safety net limits your fall in the case of failure. The government also heavily subsidizes new startups.
But entrepreneurship is generally looked down upon in a way that isn't true in America. A failed startup in the US is chalked to "at least you tried" whereas in Canada its looked upon as a moral tale of the risks of chasing childish dreams. This goes throughout society - from raising capital to what your in-laws hassle you about over the dinner table.
Totally agree. The sad thing is I'm not even entrepreneurial in the "aggressive unicorn chase" sense; I'm just a lucky guy with a rewarding and enjoyable large tech company job with good pay and work/life balance. It feels like getting anywhere near what I have now, just in Canada, would be so much harder.
I run an online business in Canada (both products and services). I virtually never take Canadian clients now, since the exchange rate has shifted markedly, and Americans tend to view $100 USD the same as Canadians view $100 CAD.
I know a few others with cross border operations and they're also shifting towards US markets.
I noticed product sales to Canadians also dried up, as my products are now 40% more expensive.
It's more like Canada is sticking to the same old plans and is failing to adapt to a future where its economic cycles no longer work.
Canada has what's known as Dutch disease. When the loonie is strong the natural resource sector booms since they get more value in return for selling these assets, however the services and manufacturing sector tend to fall off a cliff since labour cost become too high.
Historically the Ontario govt has banked on this cycle. When the loonie rises and Ontario crashes then govt spending increases to compensate. When the loonie crashes and employment increases, tax revenue increases and then they payoff the debt from the crash. Ditto can be said for Alberta using the opposite scenario.
The federal tax transfer system adds additional funding mechanics to level the playing field between provinces.
That all said, everything has become very different. Oil has crashed due to external forces and the loonie has crashed too. That's fine, but I think govt is trying to figure out why the manufacturing services sectors are not gaining traction as they historical would (which is because other countries are now more equipped to compete within Canada and are still much cheaper... Example Mexico has taken all the auto manufacturing work). At the same time housing prices are 30 to 50% overpriced and the energy sectors nose dive is not a typical down cycle, it's a long term structural change.
I'm probably wrong, but my spidey senses are telling me that Canada is going to go through a rough time and will continue to do so until the govt models these structural changes to compensate. If the Canadian govt jumps into a thoughtless spending spree (which is the current plan) using the old economic model then in 5 to 10 years Canadas outcome could be dire.
[Edit: removed "Greece 2.0" as it highlighted aspects that could not compare to Canada's circumstances.]
Might be the Greece 2.0 prediction. I was with you till there. Greece's debt was in Euros, which the Greek government didn't control.
So Greece had no option to devalue it's currency in response to a slowing economy. Whereas Canada can devalue currency (as we're doing). We have the additional benefit that our debt load is in our domestic currency, so we don't face the debt appreciation challenge many countries face when they devalue their currency.
I think Canada's in trouble, but the Greek situation is fundamentally a different type of problem.
I thought that Greeces problems stemmed from excessive govt spending leading to a situation where the tax revenue could not compensate for the debt load with a consequence of either bankruptcy or bailouts from other countries. At least that's where my comparison starts and ends.
Diversification of Canada's economy so that it isn't so dependent on commodities has been talked about for years, and successive governments have long been blamed for not doing it.
That makes it worth asking whether governments have the power to do this in the first place. What examples are there of it having been done successfully?
I accept the premise that the government spent too much time and effort focused on the resource sector, but this article, like all I see on this subject, is extremely vague on what exactly the government should be doing to create a better environment for tech companies in Canada.
Same newspaper that endorsed Conservatives, whose economic policies for the past decade was to put oil sands above everything else, the government under which we saw Canada withdrawing from Kyoto and generally have terrible environmental record, is now having seconds thoughts when oil tanked as well as other commodities tanked dragging loonie with it.
The Canadian bourgeoisie (yes I'm using that word) has a deep split in orientation -- resource extraction Calgary school vs a more established Bay st money, "Laurentian elite." With the collapse of oil price, the strength of the former has waned in favour of the latter, hence the Liberal party has hegemony instead of the Reform.
The Globe has for the last 15 years at least been schizophrenic about which of these two camps it supports. Its editorial board is a little different from the rest of the content in the paper.
> No rational economist can look at the situation in Canada and say that "Canada forgot to plan for its future by leaning on oil and the loonie" it's a ridiculous statement.
Many "rational economists" have made that statement. Even the head of the Bank of Canada himself has suggested it is regrettable that our currency is so tied to oil. He can't openly criticize gov policy and so that's about as close as Poloz can get to condemnation.
Classic hacker news comment. "I must disagree with whatever the post says and declare that no rational person could disagree with my criticism."
> Classic hacker news comment. "I must disagree with whatever the post says and declare that no rational person could disagree with my criticism."
That is even more of a "classic hacker news comment", in the bad sense, than the one you're objecting to. I've noticed that generalizations about HN in arguments always degrade the quality of the discussion. The trouble is that community members (on all sides of any divide) tend to extrapolate whatever they notice and dislike into an image of the community as a whole, which then resembles the image of their adversaries. This is bad for the community, especially because we have no face-to-face contact to mitigate it.
I don't mean to pick on your comment in particular. It's a pattern that comes up a lot when commenters diss the community.
I love how disingenuous people often use the term "rational." Like anyone who disagrees must be some irrational loon and there's no room for debate here. Its sad that even on HN, such namecalling is convincing to many with the upvote button.
Anytime I see commentary that include words "rational," "logical," or the term "man of science" I know I'm at least dealing with someone reductionist, pedantic, and usually extremist or marginalized.
Even the way we do provincial transfer payments is sane. While one industry is booming (Oil, manufacturing, tech) other "have not" provinces get payments through the federal government. This brings a measure of stability to the system.
No rational economist can look at the situation in Canada and say that "Canada forgot to plan for its future by leaning on oil and the loonie" it's a ridiculous statement.
Criticizing Canada's action on climate change is warranted, but our federal economic policy has been quite level headed.