Some of Canada’s leading think tanks badly want to make their country a dominant exporter of services. The Conference Board of Canada and the C.D. Howe Institute are among the policy shops pushing the idea. It’s easy to understand why. Canada trains lots of highly skilled workers and it boasts the sorts of livable cities in which those highly skilled people like to live. That looks like a comparative advantage if there ever was one. We’re currently paying the price for getting overly excited about becoming an energy superpower, and robots man the modern factory. If not services, then what else?
I have written previously about why we should avoid getting carried away by this idea. Few, if any, successful economies have been built a foundation on services. That doesn’t mean it couldn’t happen in theory; it just hasn’t happened to date. But if Canada is going to become an exception, it has some work to do. The most recent data suggest there is nothing exceptional about our bankers, insurers, engineers and consultants. These and other service providers have had the advantage of a weak currency for years now and they aren’t doing much with it.
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