Well this has a familiar sound.

[photofly]

Let's suppose, to boost the Canadian economy, we ban all foreign workers. Across the board. No foreign labour shall be imported!

Let's suppose also, that make sure that Canadians don't send any part of their precious economy abroad we ban all foreign imports. Henceforth, no Canadian shall buy anything that isn't made in Canada. Hurrah.

Let's see what this does for the Canadian export industry.

Bloggs of Mumbai comes along and wants to buy a million tonnes of Canadian potash. Great, says the Canadian Potash company. That'll be CDN$20million. Bloggs goes to his Indian bank and says, take my Rupees, and sell me Canadian dollars, so I can buy the potash I need.

But the bank says, well, we haven't got any Canadian dollars. They're all in Canada. They sent home all their foreign workers so no Canadian dollars are flowing into India, and nobody's bringing them to us to buy Rupees with. Go and ask the Bank of Canada to sell you some, they're the reserve bank for CDN$, they must have them all.

So Bloggs goes to Mr. Carney, and says, Mr. Carney, please take my Rupees, and sell me some of your CDN$ so I can buy Canadian potash. And Mr. Carney says "No! What use do I have for your Rupees? The Canadian government has forbidden anyone here to import anything, from India or anywhere else. It's all to protect our industry, you see. Your Rupees are worthless to me and to everyone else in Canada. We can't buy anything with them.

In the end, poor Bloggs has to get his potash from another country entirely, and what with that same circumstance applying to everyone else who wants to buy anything from Canada, the well intentioned measures taken to protect the Canadian economy by reducing imports, leads to a complete collapse of Canadian exports.

[Rockie]

Think it through: this money doesn't sit in the bank. The bank has to pay interest on its deposits, and to generate that it must lend the money (also at interest) to investors, and to small businesses, who take out loans and use it to create jobs, so they can pay the interest.

The only thing that "sits" and doesn't earn anything is gold bullion.

You and Mark Carney disagree, and since he's the Governor of the Bank of Canada I'll go with his opinion.

http://business.financialpost.com/2012/ ... tells-caw/

I'm not confusing it at all...If some industries weren't allowed to bring in foreign workers they would simply die and go away.
A good example is the fruit and wine industries who can't get local workers to harvest their product, which is sold on a world market, and couldn't compete if their costs were any higher.
As a result of foreign workers these companies make money, use utilities, buy equipment and pay taxes.

We aren't talking about the fruit and wine industry are we? We're talking about the natural resource industry in Canada that's doing extremely well thank you very much. While there are impoverished industries that can't get Canadians to do the kind of work that temporary foreign workers will do this isn't by any stretch of the imagination one of them.

[photofly]

You and Mark Carney disagree, and since he's the Governor of the Bank of Canada I'll go with his opinion.

It doesn't really matter what Mark Carney says. Nobody puts $562 billion under a mattress. It goes to the bank, and earns interest, just like your savings, and mine. That means the bank has to lend that money to be able to pay that interest.

His point may be that he expects companies to put the money to better use than the bank can - to invest it more wisely and profitably. But if he's saying the money is doing nothing then his argument is a load of rubbish.

[Rockie]

It doesn't really matter what Mark Carney says.

Did you really just say "it doesn't really matter what Mark Carney says"?

This may be your lucky day photofly. Carney's off to run the Bank of England very soon because the Brits apparently think his opinion is valuable, so there's an opening at the Bank of Canada.

[photofly]

Anyone - you - Mark Carney - the Pope - Uncle Tom Cobbleigh or Jesus himself - who claims that someone with an iota of economic sense leaves $562 billion literally doing nothing - is a moron, and I'm happy to tell him that to his face.

Proof: I'll give that person $1m a year for the loan of that $562 billion. Seeing as it's currently doing nothing and they have economic sense, they will accept my $1m annual fee, since it makes them $1m per year better off.

I will then have $562 billion dollars to lend to various countries, banks and other sound financial institutions. Which will give me an annual income sufficient to pay the $1m annual fee, and have quite a nice lifestyle to boot.

The fact that my generous offer is *not* going to be taken up by the various institutions that are "sitting" on $562 billion is proof that they are not in fact doing that.

[Rockie]

Like I said, there's an opening as Governor of the Bank of Canada and I think with your economic smarts you would be doing the country a valuable service by agreeing to do the job.

[photofly]

Here's what he said:

This is dead money. If companies can’t figure out what to do with it, then they should give it to shareholders and they’ll figure it out.

From the article:

The comments were some of the strongest Mr. Carney has made regarding the almost $600-billion in unused cash being held by non-financial companies in Canada. Cash hoarding has grown steadily since the financial crisis, as firms feel the need to retain large cash reserves in the face of uncertainty in the global economy.

The problem with Mr Carney's comments (which are designed to appeal to people who don't know better, like those members of the Canadian Auto Workers union to whom he made them) is that they're disingenuous.

He wants the companies holding the cash deposits to make riskier investments with the money, which they can do but which the banks, to whom they've otherwise lent it, can't. Unfortunately, we all know what happens when banks bend over themselves to lend vast sums of money to risky enterprises. Can you blame corporate Canada for wanting to play it safe?

Unfortunately a headline like "You're all playing it too safe with your money! Companies should go and take risky gambles with all that dosh they've got!" won't go down well with the audience, and won't get the same media attention for Mr Carney.

It certainly won't have the effect of getting everyone who can't think for themselves to blame Canadian industry: Compare "They're sitting on dead money!? That's not right!?" vs. "They're not gambling their money!? What a good thing!"

Like I said, there's an opening as Governor of the Bank of Canada and I think with your economic smarts you would be doing the country a valuable service by agreeing to do the job.

I'm the dumbest person on this forum, by a long shot, and even I can work it out. You can, for sure.

[Rockie]

Cash doesn't do anybody any good sitting in the bank. Corporations aren't borrowing that money to invest because they don't have to...it's already theirs. This is a problem both the United States and Canada are wrestling with. Economies don't grow unless money is spent, and there are hundreds of billions of dollars being hoarded by Canadian corporations that the Canadian government wants to get moving...not just Carney.

US corporations are sitting on trillions.

You can call Carney disingenuous and a moron if you like...

[photofly]

Frame the question differently: do you think that Corporate Canada should take bigger gambles with $600 billion dollars?

There's no such thing as a "corporation", other than as a collection of shareholders, and the biggest shareholders are the pension funds. Think of who loses out if the gambles don't come off. Mr Carney wants to see those risks being taken, but the people who actually own the money - people saving for their retirement - don't. It's easy to gamble, as long as it's someone else's money. But it's not someone else's.

The whole "dead money" headline is all about whipping people up to take risks. Apparently it's working.

[Rockie]

You call it gambling, most others call it investment. To economists it's called activity which is what makes the economy tick. Money is "dead" if it's not moving and there are record amounts of it not moving by choice. There was an estimate out recently that if a fraction of it was invested it would equal over 2% growth. Growth increases confidence which begets more economic activity (moving money) and more growth.

Simple, but impossible if people and corporations hoard money.

[photofly]

You call it gambling, most others call it investment.

I agree. I also call it investment most of the time, and particularly when I engage in it myself. What struck me about Mr. Carney's statement when I heard it on the radio was the way he framed his point. I'm not used to hearing central bankers use language to sway a crowd the way politicians do.

Can you imagine him standing up in front of the Union crowd and saying "Big Business should gamble your pensions!" ?

there are record amounts of it not moving by choice.

Isn't the way forward to get to conditions where people make the other choice because it's the rational choice? You won't sway business leaders to spend money "because it's good for the economy" - only because it's good for their individual businesses.

[dazednconfused]

You call it gambling, most others call it investment. To economists it's called activity which is what makes the economy tick. Money is "dead" if it's not moving and there are record amounts of it not moving by choice. There was an estimate out recently that if a fraction of it was invested it would equal over 2% growth. Growth increases confidence which begets more economic activity (moving money) and more growth.

Simple, but impossible if people and corporations hoard money.

Rockie, one of the problems is Canada has spare capacity. Why build more factories when your existing ones are only operating at 90% for example. The spare capacity problem probably won't go away for some time. It might get worse. Companies can invest all they want, but the demand just isnt there. Consumers are tapped out. Increasing supply doesn't mean demand will increase as well. With consumer personal debt levels hitting an all-time high (was in the news today) I dont see where the new additional demand will come from to encourage companies to invest more in the local economy. If anything, the consumer is going to tighten their belt further imo. More and more people competing for the same amount of jobs, driving wages down, and costs up. Less disposable income won't encourage further investment by corporations. Put yourself in the shoes of a public company that has spare capacity and faces flat to 2% demand growth at best. I think a lot of the demand we had in 2002-2007 was artificial, from the easy consumer borrowing, which has come to an end which is why we see such relatively poor growth numbers now. I agree with your premise though - money needs to move around for a healthy economy.

This is a good read for anyone interested: http://www.gbm.scotiabank.com/English/b ... 130122.pdf

[Rockie]

Rockie, one of the problems is Canada has spare capacity. Why build more factories when your existing ones are only operating at 90% for example.

The money doesn't have to be - and perhaps shouldn't be - invested in more capacity. It could be invested in upgrades that position companies to really capitalize on increased demand when things get going again, and that investment itself will create jobs somewhere else hastening that increased demand. The investment could be in their current work force in many different ways which would accomplish the same thing throughout the economy without creating an over supply. A little imagination goes a long way here.

Personal debt levels are a tsunami waiting to wipe everything out and it's an interesting discussion as to what caused it. I think a large part of the problem is our economy's reliance on consumerism encouraged in large part by financial institutions pushing easy credit onto every Tom, Dick and Harry with a heartbeat. At some point those people have to pay it off and their ability to do so is negated by decreasing disposable income. Disposable income is being pressured downward in part by...wait for it...migrant workers being brought in to do jobs Canadians are willing, able and available to do.

[NeverBlue]

ummm....they pay income tax and sales tax and GST just like you and me you Whoa, easy on the insults big fella! NS.

wow...I call someone a jerk and it's edited...someone calls me retarted and it's ok???!!!!

You and Mark Carney disagree, and since he's the Governor of the Bank of Canada I'll go with his opinion.

...so because Harper is our Prime Minister...you go with his opinions always??

We aren't talking about the fruit and wine industry are we? We're talking about the natural resource industry in Canada that's doing extremely well thank you very much.

I don't care what you're talking about...I'm talking about foreign labour...and if not for foreign labour half of my family would not be here in this great country today....contributing to our economy the whole time.

NeverBlue wrote:


Quote:

They provide NOTHING to the economy in Canada.


ummm....they pay income tax and sales tax and GST just like you and me you edited


Actually no they don't, and that's part of the problem with letting this sort of thing go on. Part of the appeal of bringing in foreign workers is that said workers will usually be treated as if they are working in said foreign country. This usually means that they are being paid in some sort of company store type system which benefits the comany more than the workers and keeps fund within. The workers being on Canadian soil in this case don't contribute to the Canadian economy since they don't participate in it being the gist of the issue. The other issue is of course that since foreign workers are often un aware of more worker beneficial labour laws here the company can treat the workers as if they are working in China or wherever they're from. They can be forced to work for longer hours and frequently safety concerns can be ignored. If we let this sort of thing go on, it would be like we never progressed from the days where it was acceptable to have one dead Chinese man for every mile of railway track.

I don't know which province you live in Shiny but in all the others if you work and live in Canada, even temporarily, you must pay income tax. The "Company store" type employment you are referring to has long since been outlawed in all provinces that I know of...it's a form of slavery and in most of the developed world it is not an acceptable means of reimbursement for services at all.

Employers must have regular periods of payments every week, every two weeks or every month. All the employees must receive their wages within 10 days after such pay period ended. You may pay by cash, check or money order, or direct deposit to their bank account.

This code allows certain deductions from your salary as payment of income taxes, Canada Pension Plan and Employment Insurance. If an employer wants to make other deductions, they would have to first give written permission. There are some deductions that are not allowed, even with written permission of their employer’s part. They cannot make deductions for mistakes. Neither can take deductions for missing cash or loss of property if more than one person has access to cash or property.

[Rockie]

...so because Harper is our Prime Minister...you go with his opinions always??

See the F-35 thread to see why I will never take anything that comes out of Harper's, or any politician's mouth at face value. There is always a political - and especially in Harper's case - hyper partisan reason behind it. GBofC, PBO, AG and the like are not partisan or political so them I believe.

I don't care what you're talking about...I'm talking about foreign labour...and if not for foreign labour half of my family would not be here in this great country today....contributing to our economy the whole time.

You're confusing temporary foreign labour with immigration. Immigrants aren't foreign labour...they're foreigners who moved to Canada. Completely different.

[NeverBlue]

You're confusing temporary foreign labour with immigration. Immigrants aren't foreign labour...they're foreigners who moved to Canada. Completely different.

...I am not confusing it with immigration...

Part of my family first came here as foreign labour...over time received sponsorship...moved to Canada... became permanent residents and eventually Canadian citizens.

THE WHOLE TIME CONTRIBUTING TO THE ECONOMY!

Quit telling me what I mean.

[Rockie]

Right, they came here to do jobs because presumably Canada needed temporary foreign labour to do them. That isn't the case with either the mines in BC or the foreign pilots being brought in because there are Canadians willing, able and available to do those jobs.

Then your relatives became immigrants which may have been their desire all along. Typically Canada welcomes immigrants because we need them and our country is founded on them. In fact we are all descended from immigrants so you can spare us that part of the story because it isn't anything special.

[NeverBlue]

That isn't the case with either the mines in BC or the foreign pilots being brought in because there are Canadians willing, able and available to do those jobs.

How do you know??? you believe what you read from only a union leader's point of view???


can a guy with 30 years experience do the same job as unskilled labour???? of course he can but will he??


we're not hearing the whole story.

[Rockie]

How do you know??? you believe what you read from only a union leader's point of view???

Nope. Nor do I believe what I read only from the mining company's point of view. Now apparently neither does the federal government, although I'm sure political embarrassment has much more to do with it than protecting Canadian jobs.

http://www.canada.com/business/2035/Can ... story.html

[NeverBlue]

again...I have no comment on this particular company or it's hiring practices.

I do not pretend know enough about BC's Temporary Foreign Workers Program to comment on this situation.

I have no comment on Canada's immigration policies either.

My posts have all been a rebuttal to Shiny's and other's comments regarding the workers contribution to the Canadian economy.

...OUT...

[complexintentions]

The idea that ever-increasing globalization is inevitable and irreversible, is one of the biggest lies ever foisted on mankind. Whenever I hear someone spewing it I always stop to examine their motives, and they are pretty much ALWAYS self-serving, from "investors" to politicians to CEO's.

Eventually, the middle classes of the places with the cheap labour (China and India, for example) will grow to the point where their cost advantage of labour will disappear. Throw in the energy cost of transporting the cheap shit to Walmart and the scales will tip back to manufacturing more locally. But in the meantime expect the middle class in North America to continue to shrink/disappear.

Living in the Middle East where classes are more clearly delineated between poor and rich, I can pretty easily see where Canada is headed. Just like Dubai, importing the cheap labour and driving the wages down. We're constantly changing suppliers on each and every service, for example the company that launders our uniforms or the company that provides drivers for the company fleet - always changing every couple of years so that the employees go from making $1200/month, to $1000/month, $800/month...even for us, they increased our hourly flying from an average of 78 hours/month to 92/month, for the same pay - effectively a large wage drop. Wage deflation, price inflation = massive profits.

The uber-rich don't care, the very poor are grateful to have jobs, and the middle class ceases to exist. That's where the present policies in Canada are taking things, not "globalization". That's just a convenient economist term flung about to justify the concentration of wealth. It isn't pre-destined or unstoppable, it just happens to be where the powers that be want it to go, and as long as the middle class can find the room on their line of credit to keep spending, they aren't motivated to fight back. But when the tipping point is reached on consumer debt, well, then things could change.

[photofly]

What are "investors" as opposed to investors? Why the quotation marks?

Whenever I hear someone spewing it I always stop to examine their motives, and they are pretty much ALWAYS self-serving, from "investors" to politicians to CEO's.

Enough of this demagoguery.

CEOs are picked by the shareholders; their pay and bonuses are designed, by the shareholders, so that they will act in the shareholders' best interests - i.e. to increase profitability.

I think first of all you need to drop the "Evil CEO" meme, because the behaviour of the CEO is the product of the stockholders; he or she is not a free agent. If they don't do what the shareholders want, they get replaced with someone who will.

Politicians, also, are not free agents. They do whatever they need to do, to get elected. If more people thought like you then we'd be hearing arguments about why politicians are holding up globalisation. Evidently, not enough people think like you do. Isn't that called democracy?

Next up, we'll ask who ask who are the shareholders of large corporations, so we can look at their motives.

Who are they? Hint: look in the mirror.

[NeverBlue]

The idea that ever-increasing globalization is inevitable and irreversible, is one of the biggest lies ever foisted on mankind.

...I guess everyone is entitled to their own opinion....I believe the biggest lie is religion BTW

Do you travel?...Eat ethnic food?...Buy anything not made in Canada?...
Do you "invest" your money at all or keep it rolled up in a sock under your matress?

Do you think Canada would survive if we sold everything we made to just ourselves?...Or bought everything we need from just ourselves?

I actually like bannanas...and kiwis...and my BMW...and my iPod...and Scotch...and French wine....

...and my wife luvs her Ben Wa Balls

Would we still be driving hoarses with carts if we didn't have GM or Ford or Honda?


I guess I'm self serving

[BTyyj]

what the shareholders want.

The shareholders want a quick buck; they don't care about the long-term survival of a company or the well being of its employees. This has been illustrated time and time again in the aviation industry. Remember Robert Milton?

Complexintentions, great post. There are pretty clear signs everywhere in regards to the direction our society is heading, and bringing cheaper labor into Canada will only exacerbate this.

NeverBlue, you are talking about globalization in terms of global trade, which isn't the issue being discussed on this thread.

[BTyyj]

Correct, but aren't you just going against your own point.

You've agreed that shareholders are not there for the good of the employees, so I think it would be fair to say that their interest doesn't lie in the well being of the average citizens of Canada as well. The shareholders have control over the company via the CEO, whose main purpose is to provide profit to the shareholders. Case and point, neither of these parties have any interest in the well being of the average citizen. The move by this mining company further emphasizes this point.

Would you not agree then that this company is not working in the interest of the average citizen? Do these citizen have the right to be represented in another form (ie democratic process)? Are they being fairly represented by our current government?