Transcript The-Canadian-Resource-Economy-Nov-18-2008

The Canadian Resource Economy;
images and reality:
Presentation by
Prof. Dr. Alfred Hecht*
Viessmann European Research Centre at Laurier
Waterloo, Ontario, Canada
Hochschule Hof
Hof, Germany
November 27, 2008
*A hearty ‘thank you’ goes to the Dr. Hans Vießmann-Stiftung
and the Fachhochschule Hof "Fördergesellschaft“
for their financial help in bearing the cost for this Canada Day
Abstarct
• After Russia, Canada is, geographically speaking, the second
largest country of the world. Hence, it is not extraordinary that
Canada ‘harvests’ many natural resources. In fact the development
of the Canadian economy is often associated with Harold Innis’
Staple Growth Development Theory. This theory suggests that
Canada’s economic development rests on the export of resources.
It started with the catch and export of fish from the east coast,
followed by furs, lumber, grains, forest products, minerals and
recently, energy. As long as the population was relatively small and
resources prices were high, development continued. However, in
the last 50 years or so, the value of raw materials have contribute
less and less to the final sales value of products. The result has
been that 33 million Canadians can no longer live of the harvest and
export of resources. Today, most Canadians work in the service
sector of the economy, followed by the processing industry and
lastly by the resource sector. Despite this the economic image of
Canada abroad is still of a country that lives from the extraction and
harvesting of its resources.
Outline of presentation
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Introduction to the country
– the geography of Canada
– the economic picture of Canada abroad
– Frankfurter Allgemeine Zeitung and the Financial Times (US)
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Canadian historic economic development (Staple Growth Theory of H. Innis)
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fish
fur
lumber
grain
forest products
minerals
energy
The modern economy of Canada
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the composition of the Canadian GDP
composition of the Canadian labour force
the most important economic sectors
exports and imports
what about the future?
Canada
Basic facts of Canada
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almost 10 million square kilometres (28x that of Germany)
twice as large as Europe and 14 time as large as Texas
east-west width is 5,514 km and north-south 4,624 km
considerably wider then the Atlantic Ocean!!!
average population density is 3 per square kilometres
8% the area consists of lakes and rivers
only 7% the land can be used for agriculture
has 33.3 million inhabitants, of which 80% live in urbanised areas!!
GDP per person in July 1, 2008 was 48,500 $CDN
Overall GDP was 1,616.228 Billion CDN$, July 1, 2008
In terms of US$ PPP Canada = $38,600, Germany = $34,100 (2007
est.) (source: CIA, The World Factbook)
The Corporate Image off Canada Abroad:
Frankfurter Allgemeine Zeitung, and Financial Times, US
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The FZ (October 30, 2008) and the FT ( October 21, 2008) give daily information on a selection of
firms trading on the Toronto stock exchange
On the TSX (Toronto Stock Exchange) about 1300 firms are listed!!!
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The FZ (Germany) gives daily stock price information on only 49 of these firms.
Their sector breakdown is as follows:
23 Resources (47%)
8 ITS (technologies)
7 Processing/Manufacturing industry
4 Services / wholesale trade
5 Financial/Banks
2 Transport companies
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The FT (US) gives daily stock price information on 38 firms.
Their sector breakdown is as follows:
14 Resources (37%)
6 ITS (technologies)
1 Processing/Manufacturing industry
4 Services / wholesale trade
10 Financial/Banks
2 Transport companies
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The resources firms are over-represented!!!
Traditional Canadian Northern Image; the polar bear
Source: http://scaa.usask.ca/gallery/northern/content?pg=ex12-3
Traditional Northern Canadian Scene: Elsmere Island
Source: http://biology.queensu.ca/~pearl/PNAS2005.htm
The old northern transport image; dog sledding
http://blog.ratestogo.com/wp-content/uploads/2008/04/dog-sledding-sunset.jpg
Hudson’s Bay Company Store - Rankin Inlet, and the new
form of transport in the North in the Winter, the skidoo
Sources: http://scaa.usask.ca/gallery/northern/content?pg=ex13-3
Newfoundland and Labrador Image;
Iceberg floating past the shore
Source: http://away.com/travel_photo_gallery/atlantic_canada/index.html
Famous Atlantic Canada Images;
Peggy’s Cove and the hated Seal Hunt
http://away.com/images/gallery/atlantic_canada/gallery01.jpg
and http://www.cbc.ca/news/background/sealhunt/gfx/titlephoto.jpg
Atlantic Canada: Peggy's Cove in the morning mist
Source: http://www.atlanticcanada.worldweb.com/Photos/TownscapesVillages/10-3697.html
The Birch Bark Canoe;
the workhorse of the Canadian fur trade
Source: http://www.birchbarkcanoe.net/images/furtradecanoemain150sm.jpg
Champlain, founder of Quebec ally of the natives
Sources: http://www.sonofthesouth.net/revolutionary-war/explorers/samuel-de-champlain.jpg
Native Canadians and the fur trade:
Source; http://images.encarta.msn.com/xrefmedia/sharemed/targets/images/pho/t058/T058882A.jpg
The Canadian beaver; main staple of the fur trade
Source: http://ci.marysville.wa.us/PublicWorks/swm/docs/beaver_files/Beaver%20Pic.jpg
Canadian loon; summer inhabitant of Canada’s
northern lakes, image on the Canadian dollar
Source:
http://animals.nationalgeographic.com/staticfiles/NGS/Shared/StaticFiles/animals/images/primary/common-loon.jpg
Canadian northern lights; image of remoteness
Source: www.greenstone.ca
Niagara Falls; tourist destination, Summer and Winter (1911)
Source: http://i12.photobucket.com/albums/a215/IleneEulich/NiagaraFalls3.jpg
and
http://www.dvc.hu/best/niagara_falls.jpg
Indian Summer in Ontario, Maple Lake, 2008
Source: A. Hecht
Maple Lake in the fall in Northern Ontario
Source: A. Hecht
Our Cabin on Maple lake
Source: A. Hecht
Relaxing on Maple Lake in the Canadian Shield
Source; A. Hecht
Indian Summer: relaxing with a beer and having an
interesting conversation with the granddaughter
Source: A. Hecht
Marshmallow feast in the evening by the open fire
Source: A. Hecht
The present workhorse of Canada’s peripheries; the float plane
Source: A. Hecht
Fishing in Canada’s North; Gogama, Ontario
Source: A. Hecht
Wheat Fields in Manitoba and Saskatchewan;
Source; http://www.ec.gc.ca/EnviroZine/images/Issue49/wheatfield_l.jpg and
http://wwwdelivery.superstock.com/WI/223/1647/PreviewComp/SuperStock_1647R-70644.jpg
Western Canada changing farm stead image
Source: http://www.iwantcanadaforgood.com/pic/homeimage-saskatchewan.jpg
First oil well In Western Canada:
Today’s office towers in Calgary
Source: http://picasaweb.google.com/joella.bryant/WatertonLakesNationalParkAlbertaCanada08#5220271439020817938
Western Canada grizzly:
Source; http://www.muchmormagazine.com/wordpress/wp-content/gallery/readers-pictures/grizzly-bear.jpg
Grizzly bears of Knight Inlet British Columbia:
Source: http://www.freshtracks.ca/images/lrg/grizzly-man-wallpaper-3-1600.jpg
Western Canada wholesome image: The Rockies
Source: http://upload.wikimedia.org/wikipedia/commons/d/d5/Moraine_lake.jpg
Historic Canadian city: Quebec City
Source: http://www.bonjourquebec.com/fileadmin/Image/decouvrez/experiences/villes/quebec/tvhd_130_g.jpg
The Canadian economic heart; Toronto
Source: http://en.wikipedia.org/wiki/Toronto
The economic growth centre in the west; Calgary
Source: http://en.wikipedia.org/wiki/Image:CalNight.jpg
Harold Innis’ Development Theory
Source: constructed by A. Hecht
Relative ressource prices through time
Source: constructed by A. Hecht
The fishing staple
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fish was the first export from Canada to Europe
Cod was first salted and then transported in casks.
Came mainly from the 'Grand Banks' of Newfoundland.
Later it first was dried on the mainland and exported to Europe
Salmon was and is the most important fish from the west coast
In 2004, the fish catch was valued at $ 2,212,274,000. Aquaculture
added another 30% to this value.
Canada’s fish catch presently ranks 17th in the world
Canada exported 2 times as much fish as it imports.
The fish catch is now highly restricted by the Federal government.
Almost all fishing villages have high unemployment rates both
on the east and west coast!!
Traditional image of the Canadian resource sector: Cod
fishing on the Grand Banks off Newfoundland
Source: US, New England Textbook, 1867
The newest staple: Oil extraction on the Grand Banks
Source: http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1SEC821443
The Fur Staple
• Main products are different furs - especially beaver
• From 1700 to 1850, furs were the most important export of Canada
• The Native Indians were part of this economy
• The demand for fur in Europe opened/explored the country
• The main carrier of furs was the canoe
• The current value of wild furs in Canada is less than 100 million
$/year.
• World "Environmental" pressure holds the demand for furs low.
The trading post; meeting place of the fur seller and the
merchant
Glorious image of the fur transporting voyageurs
Source:
Shooting the Rapids, in a master canoe. Painting by Francis Ann
Source: http://www.thecanadianencyclopedia.com/index.cfm?PgNm=TCE&Params=A1ARTA0008396
The lumber staple economy
Source: USA, New England Textbook, 1867
The lumber and wood product staples
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Canada has 10% of the world forest area
45% the country is wooded
only 56% has some commercial value
12% is found in nature reserves
only 0.5% the useful acreage is clear-cut per year
natural forest fires consume yearly 1.2% of the total
forested area
• Canada is the largest exporter of forest products (20%)
• main products are paper (26%), soft wood (20%), Pulp
(15%)...
• Total direct addition to the Canadian economy is 3% of
GDP per year.
The wheat staple – Craik, Saskatchewan
The Canadian agricultural staples:
Source: Agriculture and Agri-Food Canada, see
http://www.agr.gc.ca/index_e.php
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After the opening of the Prairies in 1885, Canada became a large grain exporter
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Canadian agricultural acreage is twice as large as all of Germany
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98% of the economy units are family business
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The average size is somewhat over 244 ha
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Main products are: Grains, cattle, milk, pigs, vegetable and fruit products
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The economy is geographically concentrated in the west, in southern Ontario and
Quebec, and in southern British Columbia
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Less than 3% of the Canadian workers make a direct living in this industry
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The contribution to the Canadian GDP in 2007 was only 2.3%
Canada’s mineral staples:
Source: Natural resources Canada,” Minerals” see,
http://www.nrcan-rncan.gc.ca/com/subsuj/minmin-eng.php
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Over 60 different minerals are mined in Canada
80% of the production is exported
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of large importance are the following;
– uranium (1 place in the world - 31.1%)
– zinc (1 place in the world - 16.1%)
– potash (1 place in the world - 37.4%)
– nickel (2 places in the world - 17.9%)
– asbestos (2 would place in the world - 22.6%)
– sulphur (2 places in the world - 21.0%)
– Cadmium (2 places in the world - 12.2%)
– copper (3 places in the world - 7.2%)
– gold (4 places in the world - 7.1%)
– In 5 place are aluminums, cobalt, plaster, lead, molybdenum, Palatinum,
salt, silver are and titanium-concentrate
– recycling may dampen demand of these minerals in the future
Canada’s energy staple:
Source: Natural Resources Canada, “Energy”, see
http://www.nrcan-rncan.gc.ca/com/eneene/index-eng.php
• Main energy sources are oil, natural gas, coal, water power and
nuclear power.
• 65% of the oil comes from traditional oil wells (65%) and 35% from
the tar sands.
• Canada is the 12-largest oil producing country of the world.
• The tar sand oil reserves are almost as large as reserves of south
Arabia (180 trillions against 260 trillions barrels).
Http://www.energybulletin.net/7331.html
• it is the 3-largest natural gas producer of the world.
• It is in 9th place in the production of oil (2005 - 3,110,000 Bbl/day).
• It is in 9th place in the production of coal.
• Alberta has 80% of the oils and natural gas production.
• Canada exports energy in the west and imports it in the East.
• Canadian energy consumption per person is almost the highest in
the world.
Shehtah Drilling Rig: Mackenzie Delta, Northwest Territories.
Tar Sands excavation 1933
2008 Canadian GDP industrial makeup
Source: Statistics Canada; see
http://www40.statcan.ca/l01/cst01/gdps04a.htm
accessed Oct. 6, 2008
July 2008
in
All industries
%
$ (000,000)
1238091
100
369565
30.01
Agriculture, forestry, fishing and hunting
25809
2.10
Mining and oil and gas extraction
56843
4.62
181482
14.74
Construction industries
74342
6.04
Utilities
31089
2.52
869617
70.61
Goods-producing industries
Manufacturing
Services-producing industries
Canadian employment by industrial sectors, 2007
Source: Statistics Canada, Employment by Industry,
see
http://www40.statcan.ca/l01/cst01/econ40.htm?sdi=employment%20industries
in '000
%
All industries
16,866.40
100
3,993.00
23.67
337.20
2.00
339.30
2.01
138.00
0.82
1,133.50
6.72
2,044.90
12.12
12,873.50
76.33
Goods-producing sector
Agriculture
Forestry, fishing, mining, oil and gas
Utilities
Construction
Manufacturing
Services-producing sector
1960 to 2000, Canadian comodety export trend
Canadian commodity exports, 2007
Source: Statistics Canada; “Exports of goods on a balance-of-payments basis, by product” see
http://www40.statcan.ca/l01/cst01/gblec04.htm
2007
%
in 000000
Exports
463,051
100
Agricultural and fishing products
34,370
7.4
Wheat
4,637
13.5
Other agricultural and fishing products
29,733
86.5
Energy products
91,647
19.8
Crude petroleum
40,998
44.7
Natural gas
28,378
31.0
Other energy products
22,272
24.3
Forestry products
29,263
6.3
Lumber and sawmill products
12,613
43.1
Wood pulp and other wood products
6,685
22.8
Newsprint and other paper and paperboard products
9,965
34.1
Industrial goods and materials
104,421
22.6
Machinery and equipment
93,428
20.2
Automotive products
77,304
16.7
Other consumer goods
18,737
4.0
Special transactions trade
8,176
1.8
Unallocated adjustments
5,704
1.2
Summary
• Seen from an export perspective, raw products are still very
importance to Canada (33,9%).
• But the resources industry produces few direct jobs and contributes
little directly to Canadian GDP. In a sense the Canadian Economy
has become developed.
• Most Canadians live in cities and work in services and goods
producing industries.
• Whether this Canadian reality will be reflected in the outside image
of Canada in the near future is questionable. It is hard to change
comfortable old images.
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für Ihre
Aufmerksamkeit