This is a post from Alex Carrick's blog that covers the Canadian construction industry.

Since 1985, Mr. Carrick has held the position of Canadian Chief Economist with Reed Construction Data's CanaData, the leading supplier of statistics and forecasting information for the Canadian construction industry.

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Construction Industry Forecasts

Notes from Alex Carrick - Dec 05, 2011

Alex Carrick
Finding Fault with Canada’s Carbon Footprint is Absurd

Canadians may not be aware that they are standing on shifting sands.

The economic underpinnings of this nation are dramatically changing.

In 2004, there were three manufacturing jobs in the country to every single construction job.

Since then, employment in the former sector has trended markedly downward. In the latter, it has kept improving.

The ratio has now dropped to 1.5 to 1.0. If the trend continues, the number of jobs in the two sectors will match within five years.

Two of the primary building blocks for Canada’s economy over the past ten years have been commodities and construction. Given the ongoing surge in demand for raw materials from emerging nations, there is every reason to expect the importance of those two cornerstones to continue until at least 2020.

The demand for the commodities that Canada has in abundance – base and precious metals, potash, uranium, diamonds, fossil fuels, forestry products and hydroelectric power – has fostered showcase mega project investments by owners of raw material sites.

A comparison of total dollar spending in the country with the number of construction jobs as calculated by Statistics Canada yields a figure of 5,000 man-years of employment for each one billion dollars’ worth of investment.

The 5,000-jobs figure relates mainly to employment on-site. There are at least an equal number of jobs in management, the design professions (e.g., architects and engineers), real estate, accounting and legal.

Plus there are the production line workers who make the building products that go into the construction projects. Construction activity significantly aids manufacturing employment.

Beyond that are the traditional multiplier effects that spread throughout the services-providing sectors including everything from haircuts to movie theatre attendance and dining out at restaurants.

The jobs provide incomes to send kids through universities and colleges to receive the educations and training that will help them survive in a highly competitive world marketplace.

The bottom line is that good jobs – as provided for highly skilled trades-people and all other categories of workers at mega construction project sites - are not to be scoffed at. 

The decision by the Obama administration in Washington to leave TransCanada Corp.’s Keystone XL pipeline in limbo has focused a spotlight on Canada’s need to act more strategically.

Our ties with the U.S. remain firm and deep, but we are no longer just an appendage.

We have to think in terms of what’s right for this nation.

Proper choices must be made to ensure our future prosperity.

We’re already losing out in terms of the returns that are going to our oil companies.

The major north-south pipeline system to the U.S. market feeds into the refinery hub in Cushing Oklahoma, which is near capacity.

Alberta producers, wishing to have their oil accepted for processing, must lower their price.

The return to Alberta’s oil companies is therefore about $10 per barrel less than it should be.

The Keystone XL line proposes to skirt around Cushing and go directly to refineries on the U.S. Gulf Coast, which are set up to handle heavy crude.

If this project is eventually allowed to proceed, the dollar return will be higher.

The per barrel income from selling to China, South Korea, Vietnam and other Far Eastern potential customers would likely be even more lucrative.

An initiative to move oil to the West Coast to supply a significant market beyond America is as important to the national interest as building the Saint Lawrence Seaway in central Canada was in the 1950s.

There are important ramifications on a regional basis.

If oil remains locked in the ground in Alberta, then that province will be denied its heritage. The West deserves its opportunity to figuratively bask in the sun thanks to the blessings that have been bestowed on it.

There are even implications for Quebec. Is that province more likely to want to stay within a country that has a vibrant fossil fuel sector than one without? The answer’s obvious. 

There is sure to be a vigorous pushback from environmentalists and native land claim activists.

It will add to the cacophony of criticism that Canada is enduring on the world stage for our energy policies.

In Europe, there are measures to label Alberta’s heavy oil as dirty.

And our failures to live up to commitments agreed to in the Kyoto Accord are brought up on a regular basis.

Let’s consider a more accurate picture of Canada’s relationship to the environment.

Japan is a highly industrialized nation with a population of 120 million, all situated within a small land mass that is about the same size as Atlantic Canada.

Canada’s citizen count is 34 million. As a hypothetical construct, take all of Canadian industry and all of our people and place them on the East Coast.

The density would still be very low compared to Japan, about one-quarter.

What are the implications for the rest of the country?

Everywhere from the eastern Quebec border to the Pacific Coast and north into the Arctic would be empty.

The rest of Canada would still be among the largest countries on earth and it would take on the aspect of one enormous national park.

There would be nothing but rivers and streams, fields and trees beaming up at the sky.

This isn’t some futuristic vision. This is the equivalent of what Canada actually is, just rearranged. 

The notion that this country is contributing significantly to the worsening of the earth’s carbon footprint is absurd. 

None of this is to deny the importance of environmental stewardship. Canada is a leader among nations in adopting best practices.

Many of the most desirable jobs, that should not be denied to our youth – encompassing higher pay and cutting-edge technology – will be in researching and monitoring the environmental implications of proceeding with resource projects.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News. Mr. Carrick also has a lifestyle blog that can be reached by clicking here.


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Read Other Recent Alex Carrick Posts

05/14 - Economic Nuggets - May 15, 2012
05/11 - Canada Rode a Second Consecutive Month of Strong Job Gains in April
05/04 - U.S. Employment Rose by a Mediocre 115,000 in April
04/27 - U.S. GDP +2.2% in Q1 2012 and Alberta led Canadian Provinces in 2011
04/18 - U.S. Inflation Low in March; Canada’s Central Bank Looking to Raise Rates
04/12 - Canada’s Trade Surplus in February Declined but Business is Optimistic
04/03 - A Tale of Two Budgets
03/29 - A strong year for new construction investment intentions in 2012
03/21 - Leading Indicator Series Add to Good News about the U.S. and Canadian Economies
03/06 - Three key trends, more forays into high-tech and the importance for construction
02/29 - Two important sources of strength: share prices and non-residential construction
02/22 - Home resale market may be picking up in the U.S. while flattening in Canada
02/16 - Good news on U.S. housing and employment is positive for Canada as well
02/08 - Home starts and job levels diverge in Canada and the U.S.
02/03 - Canada’s labour market flat in January but U.S. on a roll
01/23 - Canada’s leading indicator series continued to charge ahead in December
01/12 - 2012 holds promise but there’s no denying the uncertainty (part 2)
01/11 - 2012 holds promise but there’s no denying the uncertainty (part 1)
01/04 - How stock prices have performed depends on the timing of the data points
12/22 - Canada stands firmly in the middle of the road as it enters 2012

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