Canada's massive yet under-appreciated natural resource wealth

Summary

This discussion explores Canada's economic dependence on natural resources and the need to broaden the definition of what constitutes 'natural resources.' A new report suggests that sectors relying heavily on resource inputs, such as utilities and manufacturing, should be included, reflecting their significant contribution to the economy. Philip Cross, the report's author, argues for embracing the resource sector despite its cyclical nature, highlighting technological advancements in oil sands, offshore drilling, and fracking. The conversation challenges the perception of resource industries as outdated and calls for greater recognition of their long-term value in Canada's economic growth.

Takeaways

• 😀 The Macdonald-Laurier Institute report suggests expanding the definition of natural resources to include industries like utilities, metal manufacturing, pulp and paper, and pipelines.
• 😀 Natural resources contributed almost 17% to Canada's GDP in 2010, with resource-based manufacturing making up 46% of manufacturing output.
• 😀 In 2013, natural resources accounted for 61% of business investment in plants and equipment in Canada.
• 😀 The report emphasizes that Canada's resource sector is closely linked to manufacturing and service sectors, particularly in urban centers.
• 😀 Philip Cross argues that industries like agriculture, which rely heavily on natural resources, should be considered part of the resource economy.
• 😀 The cyclical nature of the natural resource sector (e.g., oil and gas) is acknowledged, but the sector has historically been beneficial for Canada's long-term economic stability.
• 😀 Despite the cyclical nature of resources, Cross compares the booms and busts of resource industries to the volatility seen in high-tech sectors like automotive and research industries.
• 😀 Technological advancements in resource extraction, such as in oil sands technology and offshore drilling platforms, challenge the perception that the resource sector is low-tech.
• 😀 Cross advocates for Canadians to embrace their resource heritage, pointing out how Michigan celebrates its lumber industry, which contributed to Detroit becoming a hub for the automotive industry.
• 😀 The report calls for Canada to stop being apologetic about its reliance on natural resources and instead recognize them as a source of long-term strength and economic resilience.

Q & A

What is the main focus of the Macdonald-Laurier report discussed in the transcript?

The main focus of the report is on Canada's reliance on natural resources and advocating for a broader definition of what constitutes natural resources, including industries like utilities, metal manufacturing, pulp and paper manufacturing, and pipelines.

Why does the report suggest expanding the definition of natural resources?

Expanding the definition allows for a greater contribution of natural resources to Canada's economy, including industries that rely heavily on natural resources as inputs, such as utilities and manufacturing sectors.

How much did natural resources contribute to Canada's GDP in 2010 according to the report?

In 2010, natural resources contributed $260 billion to Canada's GDP, which represented almost 17% of the total GDP.

What is the significance of resource-based manufacturing in Canada's economy?

Resource-based manufacturing accounted for over 46% of manufacturing output in Canada in 2010, underscoring its central role in the country's industrial economy.

How does the report view business investment in relation to natural resources?

The report suggests that business investment in Canada is heavily driven by natural resources, with the sector accounting for 61% of business investment in plants and equipment in 2013.

What does Phillip Cross argue about the relationship between the resource economy and other industries?

Phillip Cross argues that the resource economy is more closely tied to manufacturing and services sectors than most people realize, particularly in urban areas where commercial services are interlinked with resource industries.

What does the report suggest about the cyclical nature of the resource sector?

The report acknowledges that the resource sector is cyclical, with booms and busts, but emphasizes that over the long term, Canada has benefited more from the booms, which have been stronger and longer-lasting than downturns.

How does Phillip Cross defend the value of the resource sector despite its cyclical nature?

Cross defends the resource sector by comparing it to other industries, such as manufacturing and high-tech sectors, which also experience boom and bust cycles. He argues that just because a sector is cyclical does not mean it should be avoided.

What does Cross say about Canada's attitude towards its resource heritage?

Cross believes that Canadians are too apologetic about their resource heritage and calls for a shift in perspective, encouraging the country to embrace its natural resource-based economy rather than feel guilty about it.

How does Cross respond to the argument that technology should be the focus of Canada's future economy?

Cross counters the argument by pointing out that the resource sector is already highly technological, citing advancements such as in-situ oil sands technology and offshore drilling platforms as examples of cutting-edge innovations within the industry.