This is Canada. We only have one road. Posted by Adam Blickstein

Fareed Zakaria has an eye-opening piece about Canada's relative economic strength compared to the collapsing economies elsewhere in the industrial world. It's pretty stunning that while American conservatives deride our "socialist" friends to the north, their fundamentals--from the banking industry to health care to even their car industry--are far stronger than ours. But one thing he doesn't mention is that a great deal of their economic strength has been credited in part to a huge boon in commodities, especially when it comes to the extraction and exportation of oil from the tar sands of Alberta. But the petrol party may quickly be coming to an end:

Until recently, Canada's oil sands were the venue for one of the most spectacular races for profit of modern times. The remote, boggy landscape contains between 1.7tn and 2.5tn barrels of oil, of which an estimated 173bn can be extracted using expensive, hi-tech filtering technology. Canada's reserves are second only to Saudi Arabia's deposits, and a year ago 60 projects were being constructed by 25,000 workers living in temporary "camps".

But since oil prices began a downward tumble, energy companies including Shell, Syncrude and Petro-Canada have shelved more than US$90bn worth of oil sands investment. Charter flights ferrying staff from Newfoundland and Nova Scotia have been cut. Suncor, formerly Great Canadian Oil Sands Ltd, has suffered its first quarterly loss in 16 years. Last month one developer, BA Energy, became the first oil sands firm to file for bankruptcy protection.

And what does this all mean for Canada's economy at large?

But the economic cost of the slowdown could be high. The oil sands make up 1.5% of Canada's gross domestic product in 2000, and before the recent seizure in investment, the proportion was forecast to rise to 3% by 2020. An estimated 40,000 construction jobs are at risk.

"The worst is yet to come," warns Gil McGowan, president of the Alberta Federation of Labour. "People talk about countries like the Philippines being remittance economies, but there are a lot of communities in the hinterland of Canada that have been kept afloat by money brought home by men and women taking jobs on the oil sands."

As much as Canada is an independent success story, it's success is largely dependent on U.S. economic strength. And as American economic prospects decline, so too will Canada's. For instance, Canada recorded its first trade deficit since 1976 as exports to the U.S. dropped by 10%. The decline of it's oil industry and the tar sands is a major factor, but Canada's other main commodity exports are also suffering as demand in the U.S. for lumber and other products decline. And while true that years of saner fiscal policies and less risky regulation have left Canada in a better position than most countries to weather the financial storm, everything ain't as sweet as pure maple syrup up north. (H/t Andrew Sullivan for the Zakaria piece)

Comments

[Paul Fraser]

RBC Bank President Gordon Nixon - Salary $11.73 Million

$100,000 - MISTAKE (FISHERMEN'S LOAN)

I'm a commercial fisherman fighting the Royal Bank of Canada (RBC Bank) over a $100,000 loan mistake. I lost my home, fishing vessel and equipment. Help me fight this corporate bully by closing your RBC Bank account.

There was no monthly interest payment date or amount of interest payable per month on my loan agreement. Date of first installment payment (Principal + interest) is approximately 1 year from the signing of my contract.
Demand loan agreements signed by other fishermen around the same time disclosed monthly interest payment dates and interest amounts payable per month.The lending policy for fishermen did change at RBC from one payment (principal + interest) per year for fishing loans to principal paid yearly with interest paid monthly. This lending practice was in place when I approached RBC.
Only problem is the loans officer was a replacement who wasn't familiar with these type of loans. She never informed me verbally or in writing about this new criteria.

Phone or e-mail:
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RBC Vice President, Sales, Anne Lockie, Toronto (416)974-6821
RBC President, Atlantic Provinces, Greg Grice (902)421-8112 mail to:greg.grice@rbc.com
RBC Manager, Cape Breton/Eastern Nova Scotia, Jerry Rankin (902)567-8600
RBC Vice President, Atlantic Provinces, Brian Conway (902)491-4302 mail to:brian.conway@rbc.com
RBC Vice President, Halifax Region, Tammy Holland (902)421-8112 mail to:tammy.holland@rbc.com
RBC Senior Manager, Media & Public Relations, Beja Rodeck (416)974-5506 mail to:beja.rodeck@rbc.com
RBC Ombudsman, Wendy Knight, Toronto, Ontario 1-800-769-2542 mail to:ombudsman@rbc.com
Ombudsman for Banking Services & Investments, JoAnne Olafson, Toronto, 1-888-451-4519 mail to:ombudsman@obsi.ca

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“See David Collyer (President, Canadian Association of Petroleum Producers) debate Simon Dyer (Director of Oil Sands, Pembina Institute) on whether the oil sands are being developed too quickly. Check out all of the 30 minute debate or just watch a segment at: http://microsoft.rogersconsumerpublishing.com/macleans/”

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