A recently released research paper from the United Steelworkers (USW), The Case for Canada’s Steel Industry, raises a couple of concerns that need to be part of any decision around supporting the steel industry in Canada.
Successive Canadian governments have claimed that trade agreements like the Trans-Pacific Partnership were necessary to build Canada’s economy. Long-standing concerns about the impact on labour standards, environmental regulations and the ability of federal and provincial governments to engage in economic development have been dismissed.
Recently, however, a new concern has emerged.
A National Observer article suggests that a root cause of the Valeant scandal was a focus on what was happening to the price of shares in the short term. According to the article, the decision to cut R&D and borrow heavily to finance takeovers led to a revenue increase, which in turn caused a significant increase in share prices.
An entire province facing gas shortages for as much as a week is yet another reminder that when things are left to the markets, we have no control over how fuel and other commodities are supplied to us. And when there are shortages of commodities we depend on, we can suddenly be very vulnerable.
Last week RBC announced that its Canadian Manufacturing PMI (Purchasing Managers’ Index) had hit a new low in September. The index, based on a survey of manufacturers, found employment and new business were both falling.
Part 3 of the series on how Canada was unprepared for the drop in oil prices.
Part 2 of the series on how Canada was unprepared for the drop in oil prices.