If you can’t move it, you can’t sell it
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Manitobans are anxious to recharge the economy, moving beyond just regaining lost ground, and forging ahead with sustainable growth. And the numbers show we have work to do.
Manitoba’s 2022 budget forecasts a 3.6 per cent growth to GDP in 2022, slowing to 2.6 per cent next year. Budget 2022 describes the risks – COVID-19, supply-chain issues, labour shortages, inflation and “geopolitical instability.” But all jurisdictions are facing these same challenges.
Manitoba cannot afford to fall below the national economic average. We need to build the conditions that make sustainable, envied growth possible. And that largely depends on putting our global trade profile at the core of a provincial economic-growth strategy.
Why? Trade supports 53 per cent of Manitoba’s and 66 per cent of Canada’s GDP. Canada’s economy produces more than we can consume, so our economic health depends upon our ability to export to markets that need our products.
Trade spins off jobs — roughly 240,000 jobs in Manitoba — and generates the corporate and personal tax revenues to governments that support health care, education and social services.
But if you can’t move it, you can’t sell it.
For too long, Canada has been complacent about moving the goods to market. We accepted as “fact” that trade was, is and will continue to expand. But we invested neither strategically, nor sustainably, in trade gateways and corridors (highways, border crossings, bridges, inland and marine ports, railways, and airport infrastructure), the very arteries that move our exports and imports.
Instead, we defaulted to “shovel-ready” spending, when we should be investing public funds through a strategy that elevates projects of national significance — projects that would boost our trade productivity and, therefore, greater returns to our GDP.
Research shows that among eight competitor nations, only Mexico invests less than Canada in trade transportation infrastructure. Canada currently invests about 0.9 per cent of GDP — $21 billion annually — in transport infrastructure. To match Australia, we would have to double investment.
Further, Canada’s transportation investments are sporadic (read: shovel-ready), rather than in a sustained, multi-year plan. In fact, Canada’s investment approach is 3.6 times more “volatile” than that of our competitor nations. That volatility dramatically reduces the return on investment and has been called the greatest barrier to our export success.
We’ve fallen far behind our competitors, many of whom are selling into the very global markets Canada is targeting. They are signatories to the same trade deals and agreements.
A Canada West Foundation report titled From Shovel Ready to Shovel Worthy, released May 10, describes how the shovel-ready approach is failing our country and why we must adopt a “shovel-worthy” strategy.
It set out recommendations on how to get there, including:
– learning from the best practices of past, successful trade infrastructure investment programs in Canada
– borrowing the practices of competitor nations that have successful strategies
– lining up nationally significant trade infrastructure projects, 15 to 20 years in advance, and
– engaging the private sector for real-world experience and expertise, attracting further investments
Those strategies are seeing our competitor countries tapping markets in some of the world’s fastest growing middle-class populations.
Alarmingly, the lack of strategic investment in Canada has been noticed. Domestic and international users of our trade infrastructure have spoken loudly about their falling confidence in our trade infrastructure, about our inability to efficiently get the goods to and from market.
This, in a country whose economy is more dependent on trade than most other similar nations.
We have to address this now.
Perrin Beatty, president of the Canadian Chamber of Commerce, put it best: “There is the infrastructure we want, such as parks and hockey rinks, the infrastructure we need, such as schools and hospitals, and then there is the infrastructure that pays for these things, and that is trade infrastructure.”
It is in Manitoba’s interest to lead the advocacy to put trade at the centre of a provincial and national economic growth strategy.
Premier Heather Stefanson and Trade Minister Cliff Cullen, co-chairs of the economic development committee of cabinet, have a unique opportunity to harness trade in support of sustained economic growth, to benefit Manitoba and Canada’s long-term economic interests.
Premier Stefanson chairs the 2023 Council of Federation meetings in Winnipeg. What a great opportunity for premiers and the prime minister to launch such a nation-building effort.
Our prosperity rides on trade. We need to invest in building the infrastructure that can deliver the goods.
Chris Lorenc is president of the Manitoba Heavy Construction Association (MHCA) and Western Canada Roadbuilders & Heavy Construction Association (WCR&HCA).