Friday, 17 June 2016

Why a BREXIT, is a good thing for Canada

Suck it Mark Carney

(Mark Carney left, holding his severance package
after quitting as Governor of the Bank of Canada)
This piece will be in no way influenced by my dislike of current Bank of England Governor Mark Carney. After all, Mr. Carney has always done what's best for the people he represented. Canada may not have fared half as well in 2008 if it wasn’t for his leadership as Governor of the Bank of Canada. So how can I blame him for forwarding his career? Because hate is irrational - Mark Carney is an opportunistic shrew, who should have stuck with the country who raised him, rather than jump ship and start angling for Lordship. Alright, maybe i’m just a little mad that the UK is reaping benefits from employing one of the modern giants of international finance, and this giant happens to be a Canuck. It’s like our paradox with losing movie stars or musicians to the US. We can breed as much talent as we want, but we don’t have the market to keep these things at home. Oh yeah, Mark Carney is against the BREXIT. So suck it Mark, here’s my take. 

As I've said in the past, the Liberals apparent desire to return Canada to middle power status, rather than our previous delusions of being a great power, is a pragmatic and beneficial move. To get to the point and stop rambling, my argument has a bit to do with this pragmatic move, and a lot do with trade.

As most people know Canada and the US enjoy a pretty huge trading relationship. Our border, and the trade that goes over it, are some of the largest in the world. This was not always the case for Canada. As a former colony of Great Britain we also do a lot of trade with the UK. Most people think US trade has always dwarfed that of trans atlantic trade but, It was only in about the 1960’s that the US surpassed the UK as the our biggest trading partner. 

Bi-lateral trade between the US is a good thing though. Pragmatic through its proximity, beneficial to both nations, we’re already NAFTA and NATO buddies, this is why we are were each others  biggest trading partners. This was a special perk afforded to Canada, or at least we thought it was. We assumed we had a special little place as number one friend of the coolest kid in school. That’s what we thought. But in about 2011 China surpassed little ol' Canada and the US’ biggest trading partner. 

We’ve been undone by China, and no surprise really, proximity can only compete with overwhelming size for so long. Maybe this should be our wake up call to diversify things a little bit though. With another big surprise, i’m not the first one to suggest this either, politicians in the west coast have been pushing for pipelines like the TPP, or the Trans Mountain for ages, politicians in the east are pushing for deepwater ports for Supermax tankers, all in a desperate attempt to sell a fraction of our oil to anyone but the United States. I’m not an economist but it seems like exporting 99% our oil to a single country can be a volatile game. If our primary export market’s need for oil drops suddenly, or if an economic collapse happens, Canada is seriously at risk - in case you’ve been under a rock, both of these things have happened in the last decade. There is a sliver of hope though, and it relies on a large state, friendly to Canada, with seriously high oil prices, reducing some of its trade barriers and potentially looking for new trading partners.

You may have guessed it, i’m talking about the UK. With gas prices upwards of $2.00 a litre Canadian, there’s no reason we can’t tap into some of this inflated market. Without it’s EU trade benefits, the UK will have to pay even more to ship oil across continental Europe. The UK voting to leave he EU means their return to a much more free market economy, one that will likely open up the floodgates to new imports from nations that can offer competitive pricing. Without former EU tariffs this could be Canada.

Even if we were to tap into a small portion this market, the UK itself has nearly twice the population of Canada  making it lucrative as hell. Their economy is the fifth largest in the world, and as far as I can tell, Canada doesn’t currently export much oil to the UK. 

It’s the fifth largest Canadian commodity imported by the UK, after Gold, Nickel, Waste metal, and Uranium. Alberta is maybe not so coincidentally, number 5 on the top provincial exporters  behind the powerhouses of Ontario, Quebec, B.C., and … Newfoundland. Look, I love Newfoundland and the Newfish people, but if a province with a GDP of $3.3billion is in number number three exporter to the UK while Alberta with an economy almost ten times the size plays second fiddle, it might mean we are not exporting as much oil as we could, to a country that seems like they could use it.
This brings us back to my point about middle power status. As Canada continues to angle with China and other states for bigger role in trade and diplomacy as a middle power (regardless of how journalists try to fuck it up) doing the same with one of historical trading partners might just put us back into some sort of grace with them, giving us a more privileged place in diplomatic talks. Canada and the UK both sit on the G7, G22, NATO, UN and countless other treaties. Bringing us closer together with an increased trade relationship could have similar repercussions for our diplomacy, which I shouldn't have to point out would be a good thing.

We’ve been a one trick pony with the United States trade wise for too long, not only have we been surpassed as their largest trading partner, but they are increasingly shifting away from our oil as it is. The BREXIT could have huge consequences for Canada if the UK returns to the truly free market, and we reaffirm our position as a trading partner, and possibly become a middle power between the UK and other states. So I say vote to leave. Suck it Mark Carney. 

Note: I wrote the majority of this piece yesterday before the tragic loss of life of Helen Joanne “Jo” Cox, British Labour MP for Batley and Spen. I don’t feel like anything i’ve said will offend, but most British politicians have suspended their campaigns. I didn’t know of her career previously but from all accounts Jo was a outstanding MP, and the tragic loss of life that occurred is a loss for us all.

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