Everything is good in moderation, even the economy

The sobering new economic reality will, hopefully, help us all avoid hangovers

By Todd Humber (todd.humber@thomsonreuters.com)

The party is, apparently, over.

Jim Flaherty, Canada’s finance minister, said so. The boom times of the past? Well, we’re not going to see their ilk, at least in the near future.

“We’re in a different world today,” he said. “This is not a time of booming economic growth, it’s a time of modest growth and there needs to be some adjustment of expectations. We’re not going to see the boom times that we saw before in the shorter term.”

So is the sky falling?

It sure doesn’t seem like it. Nobody’s leaping out of windows on Bay Street. Calgary’s office towers aren’t collapsing. The street lights are still coming on at night, and black ink is still showing up on corporate ledgers.

Canadian Finance Minister Jim Flaherty arrives at the Commonwealth Secretariat news conference during the annual IMF-World Bank meeting at the IMF headquarters building in Washington on Oct. 8. Flaherty has warned Canadians not to expect the economic boom times to return anytime soon. (Photo: Yuri Gripas/Reuters)

I recall talking to a prominent business leader at a forum in Ottawa a couple of years ago. I won’t name him, because it was a casual conversation at a cocktail party and not an interview, but he raised an interesting point: He said, quite adamantly, he wasn’t a fan of double-digit growth. In fact, he thought it was counterproductive even though he made a lot of money when the times were good.

He used words like “unsustainable” and “unhealthy.” He expressed concern about the effect of unbridled growth on the environment, natural resources and on the mental health of workers.

Back in 2005, I interviewed Conservative MP Brian Jean, the representative for the federal riding of Fort McMurray-Athabasca, for a story I was working on about the oilsands and the labour shortage facing Alberta.

Jean questioned why there was such a race to develop the oilsands and the need to bring in foreign workers. (And let me stress again, he’s a Conservative MP — not a Liberal or an NDP.)

“We have a resource that is not leaving the country, it’s not going anywhere,” he said. “You can’t run a pipeline to China under the earth, so the oil is staying there. Prices are not going down, so why should we bring in foreign workers?”

Managed properly, the Fort McMurray, Alta., area would be poised to be a boom town for the next century, he argued. So why race like crazy, driving up costs, to suck every last drop out of the ground in the next 25 years?

Corporate titans may not like the message coming from Flaherty or the new economic reality that prescribes moderation. But there’s some serious silver lining here: Take away the boom, and maybe the bust goes the way of the dodo.

Isn’t sustained, moderate economic growth better than the soaring highs and lows the last decade brought? Banks like RBC and TD Canada Trust never experienced the highs of AIG or Bank of America. But they did OK for themselves. And when the party ended, Canadian banks didn’t show up at 26 Sussex with their hats in their hands, suffering from a mighty economic hangover.

Todd Humber is the managing editor of Canadian HR Reporter, the national journal of human resource management. For more information, visit www.hrreporter.com.


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