2008 recession and beyond

2008 recession and beyond: A comparison between Canada and US

Canada fared better than US in 2008 recession. Many attribute it to a better financial system in Canada. If so, Canada would fare better than US since then. However, US economy has grown significantly since 2008 while Canadian economy has stagnated. Why?

Around 2008, oil price rose significantly, approaching 150 dollar per barrel. US was the largest oil importer then, importing about 10 million barrel oil a day. Canada, on the other hand, was a large oil exporter, exporting about 2 million barrel oil a day. The rise of oil price hurt US greatly, and benefitted Canada greatly. That was why Canada fared better than US at that time.

Since 2008, US aggressively developed the hydraulic fracturing and horizontal drilling technology. Its oil output increases from 5 million barrel per day in 2008 to 13 million barrel per day in 2023. Canada’s oil output also increases significantly, from 2.7 million barrel per day in 2008 to 5 million barrel per day in 2023. Its export increases from 2 million barrel oil a day to 3.4 million barrel a day. However, Canadian government blocked the construction of Northern Gateway pipeline. It is very difficult for Canadian oil to reach the international market. Most Canadian oil is sold to US at a deep discount. This is a major source of US prosperity and Canadian poverty.

Why does Canadian government adopt policies that harm Canada? There are at least two reasons. First, weak countries are deeply influenced by strong countries. Canada is deeply influenced by US. Northern Gateway pipeline will harm US. Hence, Northern Gateway pipeline is blocked. Second, carbon tax is a redistribution of wealth from the majority to the powerful minority, inside and outside Canada. Since the powerful minority demines the fate of people, Canadian government officials will adopt policies benefiting the powerful minority, not the majority of people in Canada.

Those who actively promote carbon tax will be handsomely rewarded by the powerful. Mark Carney is such an example. Many feel that Mark Carney is highly respected and hence is highly qualified to be the prime minister. But he is highly respected by the high society precisely because he has done a lot for the high society and has screwed up the ordinary Canadians.