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Booming Canada holds further prospects for Jamaica
Dennis Morrison
Wednesday, October 10, 2007
Canada, the world's eighth largest economy and one of Jamaica's major trading partners, is showing all the signs of the boom in world commodity markets, benefiting from the sharp rise in the value of its energy exports to the USA. In the latest economic reports, that country's unemployment rate was shown to have fallen to the lowest level since November 1974, and the concern now is that pressures on its labour market are causing wages to rise at rates that could be inflationary.
Skilled Jamaican workers are already benefiting from labour shortages in Canada and further opportunities are likely to become available if that economy maintains its vibrancy. It was in response to a recruitment drive for construction workers to meet demand by Canadian employers in the provinces of British Columbia and Alberta that we saw a huge turnout of job-seekers at the Ministry of Labour last week. The prospects, however, are good only for those who are certified.
The vibrancy of the Canadian economy is most powerfully reflected in the strength of its currency which achieved parity with the US dollar on September 20, the first time since 1976. From 94.71c (US) at the end of August, the Canadian dollar is now US$1.003. At the same time, it has seen the threat of inflation recede, which makes interest rate hikes unnecessary in the short term, a factor that should help to sustain a positive outlook for the economy.
Like other commodity-rich countries, Canada is enjoying hefty inflows from its large oil reserves in its western provinces. Record consumer spending and energy investments in Alberta have played a big role in the expansion of jobs, and are feeding the demand for workers such as we have seen in the recent local recruitment drive. Indeed, a rising number of Canadian employers are anticipating a further tightening of the labour market in the period ahead as the economy has surpassed the forecasted rate of growth so far this year.
Among the countries of the Western Hemisphere, Canada stands out as a major player in the world's energy markets. Its proven oil reserves are in the order of 179 billion barrels, surpassed only by Saudi Arabia. The greater part of these reserves is in the form of oil sands in the Western Canada Sedimentary Basin (WCSB). The projections are that by the year 2025, over 3.5 million barrels a day of oil will be extracted from this source. Over 90 per cent of Canada's crude oil exports go to the USA, making it the most important supplier of oil to its neighbour.
Canada is also rich in hydro power, a good portion of which is exported to the USA, especially from Quebec province. Importantly, its natural gas reserves are estimated to be 56 trillion cubic feet, which are concentrated in Western Canada. The expansion in natural gas production, alongside the booming oil production in Alberta, is driving export growth, and the surge in wealth is evident at first glance in cities like Calgary.
Jamaica's tourist industry has been enjoying an influx of Canadian visitors over the past two to three years as the pace of that country's economic expansion has accelerated. We are beginning to see an upturn in business from Western Canada. Airlift from that part of Canada, which has always been challenging, is becoming more available and indications are that new players will enter the picture in the coming months, even as existing ones are due to expand their services. The new hotel chains also appear to be targeting the Canadian market as a major source of business.
Whereas Jamaica has concentrated its investment and trade initiatives on the US market - the world's largest - Canada's growing economic strength could offer expanded opportunities. Investment in tourism and the attraction of increased visitor arrivals from that country are areas that should receive greater focus. The stronger Canadian dollar is particularly attractive for tourists from that country who tend to be very price-conscious.
The United States is by far the world's largest economy and marketplace, as well as Jamaica's major trading partner, and it is likely to remain so for a long time. The world economy is, however, undergoing structural changes that we need to watch carefully as we seek out new opportunities for investment and growth. Canada's economic resurgence may offer such opportunities.
Dennis Morrison
Wednesday, October 10, 2007
Canada, the world's eighth largest economy and one of Jamaica's major trading partners, is showing all the signs of the boom in world commodity markets, benefiting from the sharp rise in the value of its energy exports to the USA. In the latest economic reports, that country's unemployment rate was shown to have fallen to the lowest level since November 1974, and the concern now is that pressures on its labour market are causing wages to rise at rates that could be inflationary.
Skilled Jamaican workers are already benefiting from labour shortages in Canada and further opportunities are likely to become available if that economy maintains its vibrancy. It was in response to a recruitment drive for construction workers to meet demand by Canadian employers in the provinces of British Columbia and Alberta that we saw a huge turnout of job-seekers at the Ministry of Labour last week. The prospects, however, are good only for those who are certified.
The vibrancy of the Canadian economy is most powerfully reflected in the strength of its currency which achieved parity with the US dollar on September 20, the first time since 1976. From 94.71c (US) at the end of August, the Canadian dollar is now US$1.003. At the same time, it has seen the threat of inflation recede, which makes interest rate hikes unnecessary in the short term, a factor that should help to sustain a positive outlook for the economy.
Like other commodity-rich countries, Canada is enjoying hefty inflows from its large oil reserves in its western provinces. Record consumer spending and energy investments in Alberta have played a big role in the expansion of jobs, and are feeding the demand for workers such as we have seen in the recent local recruitment drive. Indeed, a rising number of Canadian employers are anticipating a further tightening of the labour market in the period ahead as the economy has surpassed the forecasted rate of growth so far this year.
Among the countries of the Western Hemisphere, Canada stands out as a major player in the world's energy markets. Its proven oil reserves are in the order of 179 billion barrels, surpassed only by Saudi Arabia. The greater part of these reserves is in the form of oil sands in the Western Canada Sedimentary Basin (WCSB). The projections are that by the year 2025, over 3.5 million barrels a day of oil will be extracted from this source. Over 90 per cent of Canada's crude oil exports go to the USA, making it the most important supplier of oil to its neighbour.
Canada is also rich in hydro power, a good portion of which is exported to the USA, especially from Quebec province. Importantly, its natural gas reserves are estimated to be 56 trillion cubic feet, which are concentrated in Western Canada. The expansion in natural gas production, alongside the booming oil production in Alberta, is driving export growth, and the surge in wealth is evident at first glance in cities like Calgary.
Jamaica's tourist industry has been enjoying an influx of Canadian visitors over the past two to three years as the pace of that country's economic expansion has accelerated. We are beginning to see an upturn in business from Western Canada. Airlift from that part of Canada, which has always been challenging, is becoming more available and indications are that new players will enter the picture in the coming months, even as existing ones are due to expand their services. The new hotel chains also appear to be targeting the Canadian market as a major source of business.
Whereas Jamaica has concentrated its investment and trade initiatives on the US market - the world's largest - Canada's growing economic strength could offer expanded opportunities. Investment in tourism and the attraction of increased visitor arrivals from that country are areas that should receive greater focus. The stronger Canadian dollar is particularly attractive for tourists from that country who tend to be very price-conscious.
The United States is by far the world's largest economy and marketplace, as well as Jamaica's major trading partner, and it is likely to remain so for a long time. The world economy is, however, undergoing structural changes that we need to watch carefully as we seek out new opportunities for investment and growth. Canada's economic resurgence may offer such opportunities.