Yesterday, Statistics Canada reported that the Canadian economy had a month of fossil-fueled growth in August.
Overall GDP was up by 0.3%, only half as much as in July but still a respectable monthly growth rate. By far the strongest growth of any industry was a 1.9% increase in “Mining, quarrying, and oil and gas extraction” – its fastest growth since January.
This sector’s growth was driven by oil, gas and coal extraction, even as other types of mining and quarrying declined. Most other goods-producing sectors – manufacturing, utilities and construction – also declined.
US Steel recently announced its intention to permanently stop making steel at its Hamilton plant, but to continue using its coke oven to process coal for export. That news epitomized Canada’s ongoing shift away from value-added manufacturing toward fossil-fuel exports, as I note in today’s Claudia Cattaneo column in The National Post (page A1 or A9, depending on the edition) and Regina Leader-Post (page D1).
Statistics Canada also reported yesterday that average weekly earnings rose by 1.3% between August 2012 and August 2013. By comparison, inflation had been 1.1% during that year. In other words, Canadian workers have experienced almost no increase in purchasing power over the past year.
This lack of purchasing power is a drag on economic growth. Policymakers should be trying to boost wages and consumer spending. Instead, the federal government continues to attack workers’ rights, most recently by trying to deprive its own employees of collective bargaining.
- PEF Session at the House of Commons Finance Committee (December 2nd, 2013)
- Black Friday GDP: Consumption Slows, But Inventories Jump (November 29th, 2013)
- Grounding the Toronto Island Airport’s $1.9-Billion Claim (October 14th, 2013)
- What happened to the recovery? (October 3rd, 2013)
- A Fine Balance: GDP Growth by Sector and the Impact of Austerity (September 10th, 2013)