EDITORIAL PAGE — The readiness is all

Despite efforts — not one, but many — to stimulate investment and consumer confidence by lowering interest rates, Canada’s domestic economy remains sluggish. Unemployment numbers are still high, and even those with jobs are facing uncertainties as downsizing continues both in the public and private sectors.

This gloomy backdrop belies the strong performance of Canada’s export market. According to Industry Canada, our share of exports of goods and services in real terms of gross domestic product (GDP) rose sharply to more than 41% in 1995 from 29% in 1990.

Metals and minerals made a strong contribution; overall, the sector contributed $23.7 billion, or 4.4% of Canada’s GDP. It also provided more than 300,000 jobs, ranging from exploration to mining to metal fabricating.

By the end of 1995, Canada’s trade surplus for the minerals and metals sector had grown to $14.6 billion — an increase of some 18.2% over 1994. The U.S.

remained our main trading partner, receiving about 80% of our total mineral exports and 66% of total non-fuel mineral exports. Canadian producers were aided by the lower Canadian dollar, as their commodities are paid for in higher U.S dollars.

The strong performance of the export market is an interesting development, in light of the heated debate that took place during the 1980s, when the Canadian government first proposed the idea of a free-trade agreement with the U.S.

Later, the agreement was enlarged to include Mexico, which, if anything, added fuel to the suspicions expressed by union leaders, the media, artists and academics (and just about everyone else). They argued that the North American Free Trade Agreement (NAFTA) would undermine the Canadian economy and, at the same time, erode our cultural identity.

On the surface, it is possible to argue today that NAFTA has done exactly that. Many thousands of Canadians have lost their jobs. And plenty of people are opting for Baywatch rather than Road to Avonlea.

To look deeper is to acknowledge the fundamental changes that have taken place worldwide to challenge the economic dominance North America had achieved after the Second World War. During the 1950s, Canadian and American firms enjoyed a near-monopoly in supplying goods and services domestically, as well as elsewhere in the world. Great Britain, France and Germany were still rebuilding from the war, as were Japan and other countries in the Far East. Today, all these countries, plus many more developing nations, have become powerful economic forces — and major competitors — in the global economy.

To look deeper is to realize that the Canadian population is small — indeed, tiny — in comparison with its vast territory. The population is also aging, which means that the big bulge of consumers — the baby-boomers — already own virtually every widget and gadget to be had at the local mall, with plenty left over to recycle at the neighborhood garage sale. By contrast, most developing nations have a more youthful population still in the throes of setting up households.

All this means that Canadian companies must look outward, rather than inward, for growth opportunities. The forces driving the global economy are so powerful that it is absurd to suggest we can insulate ourselves from them by closing our borders. Better to meet the competition head on than to pretend we can bring back the so-called good old days.