Road to economic revival is built on trade
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Hey there, time traveller!
This article was published 11/02/2021 (547 days ago), so information in it may no longer be current.
THERE’S a palpable sense of hope across Manitoba as the spread of COVID-19 abates due to the hard work of citizens and the arrival of vaccines. Repairing the damage done to many facets of our society, including small businesses, will require an economic revival.
However, skyrocketing public-debt levels demand shaping a more resilient economy, one capable of producing the sustained growth in government revenues necessary to both pay down deficits and flow adequate funding to our world-class social programs.
In Manitoba, that revenue generation relies heavily on trade. Some 53 per cent of Manitoba’s GDP, or about $37 billion worth of business, is generated from trade-related activities, sustaining roughly 240,000 direct and indirect jobs. Canada’s economy is also dependent on international trade. Exports directly and indirectly accounted for almost three million jobs in 2011 according to Statistics Canada, or 17 per cent of all employment. Canada’s trade-to-GDP ratio was just shy of 65 per cent in 2019.
So clearly, it is trade that holds the best hope for our provincial and national economic revival.
That reality demands a whole-of-government approach. Let’s start by asking not just where the public dollars for broad infrastructure investment are being used, but why. Economic analyses verify investment in strategic infrastructure holds amongst the highest public “return on investment” to GDP. Those returns range between $1.30 to $1.90 in the same year, for every $1 invested. That being the case, governments need to ask: are our program dollars working as hard as they can to grow the economy?
There is an intrinsic connection between trade, infrastructure and prosperity. That is recognized by global “confidence” indices that assess and rank countries’ infrastructure investments, including transportation-asset condition, especially relating to trade gateways and corridors.
Our infrastructure investment strategies — or absence thereof — are well known by investors and trade partners, and help shape global interest to invest in our country and province. Consider this: in 2008-09, Canada was ranked 10th globally in the World Economic Forum’s Global Competitiveness Index for transportation infrastructure reliability. However, with reduced trade investment programs, as of 2019 Canada’s rank dropped to 32nd.
Manitoba’s economic revival needs the support of a robust provincial trade policy framework that organizes infrastructure investment around “ROI to GDP” as a core principle to attract investor interest. Lest you think that a pipe dream, CentrePort Canada has already attracted more than $1 billion to its footprint — with more to come — because of its cheaper-better-faster connection to global markets proposition.
Further, Manitoba Infrastructure as a department is not being harnessed to its full potential. It could do more than manage transportation assets and an annual capital program.
Its mandate should be reimagined and repurposed to identify and lead investments that help elevate our provincial global-trade profile. Recognizing the pent-up potential in Manitoba’s trade advantage as a geographic hub connected to all four points of the globe by air, land and marine ports, MI’s new mandate should task it to:
- idenitify trade gateways and corridors as key assets for strengthening existing markets and developing new trade partners;
- prioritize the infrastructure projects with the greatest ROI to GDP;
- ensure an efficient, province-wide system of highways designed to carry heavy trucks and high traffic volumes to support Manitoba’s producers and encourage value-added enterprise;
- promote a culture of regional economic development with co-ordinated regional funding that incentivizes infrastructure investment decisions among proximal municipalities. Canada’s other major cities have been attracting investor and site-locator interest for years; it’s time our Capital Region, situated strategically to CentrePort, got in the game;
- ensure existing highways are well maintained, for the efficient movement of people to jobs and goods to market.
Economies across the globe are on the cusp of reopening. We can build a more resilient economy by strengthening ties with existing trade partners and building new relationships in emerging global markets. Adopting a robust provincial trade policy framework would send a clear signal to the world that Manitoba sees clearly its potential and is ready to invest in a strategy to become a regional trade superpower.
As a keystone province, we are geographically positioned for success. Expanding our global trade profile ensures that our economy and social welfare programs don’t just benefit, but thrive.
Chris Lorenc is the president of the Manitoba Heavy Construction Association.