Canada's Economy Analysis

My Perspective on Canada’s Economy, Government Responsibilities, and a Merge with America

In this essay, I would be discussing a prominent economic problem that Canada faces today, which is its weakening currency, that is a prime factor as to why Canada’s economy to worsening. Moreover, I would also discuss about the right for Canadians to look up to their governments for solutions to the major problems they face, as well as the better decision of giving citizens opportunities to learn skills required for the future, even if it results in increased deficit, as opposed to reducing both the Canada’s deficit and amount of services offered. In addition, a notable topic of discussion also includes my reasons as to why In my opinion, one of the
most prominent economic problems Canada faces today is the low value of the Canadian dollar, which I’m very concerned with. This is the case because a low currency can lead to inflation as the price of imported goods are higher, which poses a threat to both Canadian consumers, and businesses that rely on imported goods, machines, and/or equipment. Thus, this leads to less consumption, and as a result, higher unemployment rates and/or more creation of part-time positions instead of full-time positions because there isn’t as great of a demand for employees. Furthermore, though Canada’s oil industry is receiving some benefit, it has been illustrated that there are still many negative factors imposed. Because of the low dollar, 65% of Canada’s oil and gas workers have lost their jobs in 2016, while the low price of oil, also caused by the weak dollar, is also responsible for the negative effects imposed on compensation, employment, and both federal and provincial taxes. In addition, this also creates burden on many households as household debt rises, which can be a major consequence for the economy as well. In terms of GDP, it also shrank, thus, reducing national income and spending power. Hence, the weakening Canadian dollar is a factor that hinders economic growth, thus rendering it a prominent problem that Canada, as well as many Canadians, face. Moreover, the increasingly weak Canadian dollar is also an indicator that Canada’s economy is worsening. It seems evident, from my perspective, that Canada’s economy is worsening because of its weakening currency (which is predicted to have a lower value of 65 cents US in 2017). Not only that, but because of Canada’s weakening currency, it would also cost more for Canada to service its foreign debt, while jobless rate is currently around 7% - thus, a cycle that results in less: consumption, consumer spending, production, and need for full-time workers. In addition, the negative effects on businesses that rely on imported goods, and equipment would further contribute to the worsening of our economy as well, as prices rise and there’s less demand from consumers to purchase those products. Moreover, the high amount of household debt at $1.67 per dollar of disposable income also contributes to negative affects on the economy, while less consumption would also mean less taxes that the government could collect, thus, an increased difficulty in paying off Canada’s government debt of approximately $1.3 trillion and providing services for Canadians that could benefit the economy as well. Hence, it’s feasible that a recession, as well as the further worsening of our economy, may occur if our current circumstances which include continual increase of government spending and debt, and weakening currency, continue. As a result, the directions and support from the government would be greatly appreciated by Canadians.
It’s agreeable that Canadians should have a level of entitlement to look to their governments for solutions to the major problems they face as the government has a level of control and power that can better address the problem.
Moreover, they also have great teams of professionals and knowledge that can allow them to create better decisions and policies, while also having control on funding, and budget. Thus, they have a responsibility of solving issues as they likely have better insight on feasible solutions that work inline with their budget, though consideration of the ideas, opinions, and approval of various citizens is also greatly encouraged because at the end of the day, they are the group that are most affected by certain issues. A widespread problem, as mentioned above, is the weakening of our dollar as this restricts Canadians from travelling to other countries (due to higher costs). Moreover, the weakening dollar also creates a breeding ground for inflation and increasing household debt that is a burden to Canadians. Thus, the government could provide, and execute solutions to possibly increase the value of the dollar, lessen the burden for Canadians, and/or better distribute their spending and wealth, which they have a better level of control over, to prevent further negative effects on the economy. In addition, another widespread problem that Canadians face include the distribution of government wealth which leads to certain services being underfunded. One such
example is public education, which is funded by provinces, as it affects a great number of Canadians and the future of Canada. More specifically, since B.C. apparently has the 2nd worst funding in this sector, which is not extremely surprising considering that they imposed shutdowns on certain schools, it’s evident that this is a problem that must be addressed, and solved by the government as they have the power, and control to do so. Moreover, according to one of my teachers, it’s evident that student funding has gone down since the funding per student (EX: for materials to perform dissections and labs) has decreased from $5 to $4.

Thus, inline with the fact that funding is needed to invest in programs, and educational institutions that give people skills for the future. If I was the Minister of Finance for Canada who must decide to either reduce the government deficit, even if it means a reduction in services, or invest in skill providing programs that would equip people for the future, even if the deficit increases, before budget day, I would likely choose to invest in skill providing programs that would equip people for the future, even if the deficit increases. This is because of the fact that skills are a must if we want to be at the top of our fast-paced, ever-changing world. Moreover, skills that equip people for the future would likely also lead to more innovations, start-ups, and businesses, and therefore, more jobs. More jobs available means more consumer spending, and a lower unemployment rate which would lead to a growing economy which would benefit Canada in the long run as well. Thus, I believe that this is a better choice as it would benefit Canada in the long run. On the flip side, if I were to reduce services, people would not have the optimal skills needed for employment. Therefore, employers would likely have to shell out extra cash to fund for better training which could lead to less jobs being created as they had distributed their wealth to training. Thus, with less available jobs, unemployment rates would increase. Hence, there would be less consumption and production which would lead to slower economic growth and in the long run, possibly a greater deficit as the government at some point would have to implement solutions to overturn the situation. As a result, I believe it’s best to equip people with skills first, though it may lead to temporary negative effects. Moreover, if we look around the world, the least educated populations are the poorest who live in unadvanced countries which goes to show how big of an impact relevant education and skill training is for the benefit of citizens and the government in general. In addition, without skilled individuals, it would not matter how many jobs we have available in the future, or if government deficit would increase relatively, as people wouldn’t be able to produce the needed goods/services required by our future society, and thus, lower wages, less consumption, and increasing deficit due to less lucrative/skilled production as a result of an unskilled workforce, would be a nightmare for Canada.

Moreover, in terms of nightmares, Canada joining the United States would be a definite one from my perspective.
For one, there would be major clashes in government structure, policies, and government spending which includes possible examples like gun laws, the election system, military spending, and healthcare, which are greatly distinct. Furthermore, Canada’s policies and government spending regarding those topics seem to fare better than the U.S. as, for example, healthcare in Canada is “free”, while there were many complaints during American election debates that reflected poorer on the American healthcare system in comparison to Canada’s. In addition, aside from those policies, a merge between Canada and the U.S. could also lead to riots, conflict, and dissatisfaction among French Canadians which is bound to cause trouble. Furthermore, curriculums would also have to be altered as well. Thus, because of these issues that weigh more and have a greater value than some economic benefits (ex: cheaper goods in the U.S.), the merge of Canada and the U.S. proves to be a disastrous combination that is bound to be filled with conflict, and
outrage.

Thus, in conclusion, Canada’s apparently worsening economy is greatly affected and influenced by the weakening dollar. Moreover, citizens are also entitled to look to the government for solutions especially since they have more control and power, while investments in the education of people to greatly increase their skillset for the future is of more importance than a possibly increasing deficit. In addition, a merge with America, in terms of policies, and laws, wouldn’t make Canada a better nation, though the lower prices of American goods may seem nice to Canadians.