With the recent passing of Canada Day, national pride was at the forefront of Canadian minds. Through the parades, the face painting, the flags and the fireworks, we came together as a nation to celebrate the many things we are able to be thankful for. One thing that often gets overlooked in our things to be thankful for is our current financial climate, especially after going through a recession. We weathered the storm with confidence and we are now on the road to prosperity. We have our Conservative government to thank – in part – for this. More importantly, we have Bank of Canada Governor Mark Carney.
On Thursday June 21, 2012 Governor Mark Carney spoke at a luncheon hosted by the Atlantic Institute for Market Studies about the transformation currently underway in the global economy. He argued that an open, resilient financial system was needed to sustain global growth. On paying down the debt, he said that “Austerity is a necessary condition for rebalancing, but it is seldom sufficient. There are really only three options to reduce debt: restructuring, inflation, and growth.” He recognized that the most “palatable strategy to reduce debt is to increase growth.”
Private growth flourishes in an environment of stability; it needs to be taxed in a diverse, competitive, resilient and open financial sector. Canadians understand the value of hard work and perseverance. We also understand that jobs are necessary for individual prosperity and for a strong national economy. If there is one day for Canadians to celebrate what unites us, it is Canada Day. We must not stand divided along regional lines, but continue to work together towards jobs, and prosperity through growth.
Governor Carney also had one key insight that is so simple; many of us just might call it common sense. He said that “we must address, once and for all, the unfairness of a system that privatizes gains and socializes losses. By restoring capitalism to the capitalists, discipline in the system will increase and, with time, systemic risks will be reduced. Most importantly, the knowledge that major firms in markets far away can fail, without meaningful consequences at home, will restore confidence in an open global system.”
In any financial system, those who reap the rewards must also internalize the losses. A disciplined system where systemic risks are reduced will help Canadians on the path to further prosperity. Faith will be regained in a system that, when done properly, benefits all Canadians. The rich will get richer- but so will everybody else. This is the essence of capitalism, and the cornerstone of any open market.
This Canada Day long weekend, we gather together to celebrate our heritage, but also to look to our future. Our future will provide a world of opportunity for ourselves, for our children, and for our future and will continue to place Canada in the limelight of the world stage. With this recognition comes responsibility. Canadians have the tools and the stability we need to prosper in the 21st century. We must be thankful for this.
We must also be thankful that we have individuals such as Governor Mark Carney leading us to success, and that somewhere in an economics classroom in Canada we have somebody learning the necessary skills to continue our path to growth in the coming years. This is our century, and our time to shine. So let’s continue to move forward in a way that would make both the Fathers of Confederation and our future generations proud.
Alanna Newman is a second year student at Trinity College, spending the summer in Atlantic Canada.
The views expressed in this opinion piece are the author's own and do not necessarily represent those of The Prince Arthur Herald.
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