In Ontario it seems everybody knows someone who has left for Alberta.  With oil prices going threw the roof over the last year the pot at the end of the rainbow was Alberta.  They say in Northern Alberta if you have a pulse, you have a job.  That’s one reason why our greater Canadian economy is racking up such impressive statistics over the last year.

Well, as they say in Montreal, a funny thing happened on the way to the forum.  This past week the price of oil dipped below $60 US/barrel settling last Monday at $61.03.  There is a softening in the housing market in the US.  Suddenly there are some saying there is a distinct possibility that Alberta boom will go bust.

This is what the International Monetary Fund (IMF) says about the Canadian economy in their semi-annual world economic outlook.  Remember, the IMF is an American club.  Take what they say with a grain of salt.

“Canada’s economy remains robust with the only significant risks to continued solid growth being external.
Canada is “benefiting from its strong macroeconomic policy framework and the boom in global commodity prices.”
The booming oil and gas and mining economies have helped produce stellar growth in Canadian provinces such as Alberta, British Columbia and Saskatchewan.
Meanwhile, the manufacturing sector in Ontario and Quebec has been squeezed by rising energy costs and a high dollar that has curtailed exports to the United States.
Atlantic Canada, meanwhile, has shown growth in energy-producing provinces such as Newfoundland and Nova Scotia but weakness in other parts of the region.
“The main risks to the outlook are external, including the possibility of a sharper than expected slowing in the U.S. economy and a disorderly adjustment of global imbalances that could result in a substantial further appreciation of the Canadian dollar.”
Inflation is well contained and “a strong fiscal position remains at the centre of the new government’s economic policies,” which include commitments to reduce public debt, contain expenditure growth and lighten the corporate sector’s tax load. (IMF, September 2006)

So the IMF is very bullish on Canada.  In economic heaven that’s a good thing because they are very influential.  They help regulate the world movement of capital.  In the third world they are more seen as an over bearing big brother of finance forcing countries to tighten their belt while some people face hardship. Countries like Canada are one of their glamour boys.

Case in point is our federal surplus.  Pegged last week at $13.2 billion, it is one measure of how healthy the Canadian economy really is.  What we’ve had is a 1% cut in the GST.  However even with that (which represents about $5 billion) our surplus is still very high.  It led last week to a public signing by Finance Minister Jim Flaherty of the surplus onto the declining federal debt level.

It is the best of economic times.  However for those of us in Chatham-Kent it looks good from afar.  The community of Wallaceburg has been reeling from plant closures and high unemployment.  The mayor and the economic development director traveled to Italy last May in an attempt to save Wallaceburg jobs when an Italian company showed interest in re-investing in the old Waltec plant.  However, it wasn’t to be and the people of Chatham-Kent and Wallaceburg are looking to catch some of that good economic news which seems to permeate the rest of Canada.

In many ways we are an economically depressed area surrounded by the economic whirlwinds in the GTA, London and Windsor.  However, capital is a bit like water.  Water flows to the lowest possible point.  Capital flows to where it gets the greatest return.  At some point that means it flows to a place where the cost of living is lowest.  When you compare us versus the rest of southern Ontario, that’s right here in Chatham-Kent.  So it’s going to happen.  The question is when?

It gets back to that age-old question.  What comes first?  Is it the chicken or the egg?  In Chatham-Kent’s case the chicken and the egg have come to all those other communities first.  Eventually, it’s going to happen here because our lower cost of living represents an opportunity for immigrants.  Many have already seen that opportunity.  At some point if the stars align it’ll be a flood.  That new capital in our community will create jobs and we’ll start to enjoy the economic prosperity, which other communities are currently enjoying.

It will happen.  The hard part is getting the natural economic levers to move quicker.  Out migration must stop.  New immigrants must flood in.  The chicken must come and so must the egg.  With municipal election signs springing up all over, my hope is that our politicians get it too.