Despite continually being told that Canada has been one of the top economic performers throughout the recent world recession and financial crisis, we are not content to rest on our laurels and it appears that we continue to strive for better things. Canada is in the process of negotiating a comprehensive Free Trade agreement with the European Union. My old high school motto - Agimus Meliora - is no doubt also a fitting national slogan.
Given that we may be about to acquire a whole new slew of closer trading partners, what is interesting is a comparison of our employment performance with some of the major members of the European Union. While we continually compare ourselves to the United States, a free trade agreement with the EU will generate a whole new set of potential comparators. It turns out that when making comparisons, not only is timing everything but also who you choose to compare yourself to.
Figure 1 shows employment growth for the period 2000 to 2011 and Canada's performance is indeed superlative over this long time span compared to any of the major European countries. We trounce mighty Germany and the only other country that can touch us in terms of employment growth is/was... yes Spain. They had the second highest employment growth rate over this entire period which given their recent difficulties means they had a spectacular employment drop during the recession.
When you narrow down the time period to 2007 to 2011 - the era of the financial crisis and recession - Canada still does well but Austria, Germany and Belgium do slightly better (Fig 2).
However, suppose we now divide up these countries into those who experienced positive employment growth over the 2007 to 2011 period and those who experienced employment decline. Canada is compared to each group in Figure 3. When compared to the "positive performers", we are in the middle of the pack as we outperform Sweden, the Netherlands and France. We of course outperform all of the negative performers - what is astonishing is just how badly some of them have done over the last few years.
We are negotiating a Free Trade agreement with Europe but there are definitely "two Europes" in economic terms which must invariably complicate negotiations. Who do we see as our new trade partners? Is it firms and consumers in Austria, Belgium and Germany? How will Spain and Italy and perhaps even France feel about such a deal given their economic performance?
France may be worth worrying about given that the incoming President Hollande has apparently already remarked on the need for more euro-centered policy. On the other hand, one of our fastest growing export markets over the last few years has actually been the UK and that market has continued to grow despite the lacklustre overall performance of the UK economy.
However, the value and nature of our trade with France is such that we do not need to be concerned about their opposing an EU trade deal with Canada - indeed we import more than we export to them. In 2009, Canada exported 2.7 billion dollars worth of goods to France but imported 5.6 billion dollars. Trade with Canada is very good for France. Compare that to the UK which the same year received 13 billion dollars worth of our exports but from which we imported 8.5 billion dollars. Much of France's Canadian trade is with Quebec and Manitoba and we are also a significant destination for French foreign investment. We apparently also export similar goods to each other: engines, aircraft parts, and pharmaceuticals.