Businesses want stability: it is what affords them a sense of predictability in their drive for profits.
So, when we see periods of instability, whether this is political or economic in nature, businesses are very reluctant to expand into a market, for fear of taking on undue risks.
This seems like common sense, but what many of us are unaware of these days is the growing uncertainty of the western world, which is hampering investments into its economies.
From the wave of uncertainty that has washed over Europe since the Brexit vote, to the debacle of the U.S. elections, issues coming on the heels of an economic crisis, businesses are now sitting back, waiting for a sense of surety before further investing.
We are not immune here in Canada either, for the collapse in commodity prices has adversely affected us. Which behooves the question: what are our governments doing to create a sense of stability here at home?
We are theoretically at a perfect economic juncture to encourage investment into our economy here, especially in Alberta, but we have seen little movement in that direction over the last few years.
Some will immediately blame the change in governments, which is a variable. Uncertainty over tax regimes and new policies does have a negative impact on business investment, but these are usually issues that businesses can quickly adapt to once they understand the direction of the new government. But there seems to be something else creating hesitation for investment in our economy. Could this be the shift to ideologically based policies that has occurred within Canada and Alberta?
Ideology offers less certainty, as it can mean so many different things to members within the same group, let alone when there are competing ideas. A prime example of this is the ongoing battle over the oilsands and the carbon taxes, which has two polemical positions being juxtaposed within the media, with the political pundits doing little to allay fears and build certainty. This is having adverse affects upon our economy. We have not seen a surge of investment from green businesses or our traditional industries, and this lack of movement should be telling. Canada has itself become too big a political risk at the moment.
Maybe it is time to dial back the rhetoric from all sides. Our governments need to take positions, clearly and firmly outlining their plans for Canadians and Albertans. Any actions that are ambiguous or elusive are not working for the economy. The opposition parties need to accept that they lost the last elections, and stop acting like they are still on the hustings; they need to present some constructive ideas and not just empty promises. For, while they squabble like spoiled children, the Canadian economy is suffering, presenting the image of instability. We are all paying the political and economic price for this recklessness.
John Kennair is an international consultant and doctor of laws who lives in St. Albert. His commentary first appeared in the St. Albert Gazette on Oct. 1.
