Canada is a trading nation, endowed with immense natural wealth. The problem for Canada in terms of diversification has been its reliance on the American market, which actually worsened in 1994 with the signing of NAFTA.
Gravitational pull is hard to overcome, as an ever expanding demand from customers in close proximity to production in Canada was, and still is hard to ignore.
North-South trade, and Canada’s immense geography has led to a dependence on American markets.
However, in light of very recent shifts in America’s politics, Canada is now forced to reevaluate its strategy.
The recession of 2008 underscored the shift in global economic weight away from the west, and in particular, the U.S.
China and emerging markets in Asia have accounted for over 75 percent of global growth, and while a new activity for Canadian exports, Asia is becoming a welcome alternative to the U.S.
However, security of demand is now threatened by Donald Trump, at a time when American demand is projected to plateau for the foreseeable future. All of which means that for Canada, slow growth in America, intense competition and new political realities require a growth in diversification, based on the growing demand from Asia.
One major advantage that Canada has over other global competitors in the supply of oil and gas, lies in Canada’s stability. China, in particular is seeking long-term sources of oil and gas, and new clean energy, LNG, Hydrogen, etc.,
There is a clear strategic alignment between Canada’s interest in security of demand and Asia’s security of supply. Japan, Korea and China are all dependent on energy imports, including technologies surrounding electric vehicles and hydrogen vehicles.
Innovation and technology is key. The benefits for Canada of an expanded energy relationship with Asia has the potential to provide substantial benefits to Canadians all across the country.
Key is the energy transformation infrastructure, particularly in British Columbia, which is the tidewater outlet through which all oil and gas must flow. New, massive facilities for the export of LNG, oil and LPG have been created. Now is the time for Canada to wean itself off America, not just for the short term, but forever.
The benefits of this new and growing relationship signals opportunities for diversification of other chemical and mineral industry products to the Far East.
It’s time to slowly shut the spigot to the U.S. while opening one to the Far East, particularly in light of America’s politics, and its increasing decline in consumption generally.
The other geopolitical considerations are that Canada will do business with clients who respect Canada, and have a genuine interest in a long-term, bilateral relationship that serves the interests of both parties.
As for America? It appears that ship has sailed, and won’t be coming back.
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