ECONOMIC ISSUES 1980-Today

1980s: Economic Recession In the late 20th century, the United States continued to be Canada’s most important trade partner. Therefore, the 1980s recession in the U.S.A had a big impact on Canada’s economy. Consequences of the 1980s Recession: Many primary and secondary sector jobs were lost (but the tertiary sector is growing) Unemployment in Canada increased, (12% in 1983) Consumption decreased (people had less money to buy things) Increased gap between rich and poor Many home owners lost their homes (because mortgage rates increased).

Privatization/Questioning the Welfare State VS. Socialism/Welfare State In an economic recession, the government should intervene in order to help the population. Ne0-Liberalism The government should NOT be intervening in the economy because it makes people too dependent. (less taxes, more economic freedom) Arguments against government intervention: Government spending leads to more debt, which will have to be paid by future generations. Government taxing big businesses will slow down economic development

Privatization/Questioning the Welfare State As a result of neo-liberal ideas, the governments of Quebec and Canada CUT spending and privatized crown- corporations. Examples of Neo-liberalist policies: Privatization of Air Canada and Petro- Canada Cut back on public sector jobs and wages Privatization of some public services: private clinics, private schools (people can pay for faster services)

REVIEW QUESTIONS Which sector continued to grow in Quebec, during the 1980s? Identify two consequences of the 1980 recession. What school of thought became popular during the 1980s, advocating for less government intervention? In the 1980s, why did government privatize some crown-corporations?

Globalization of the Economy Globalization: more interaction between different countries around the world Free trade agreements were signed between Canada and other countries, in order to encourage trade (no customs duties on certain goods/services). 1989: Canada and USA Free Trade Agreement 1994 NAFTA: North-American Free Trade Agreement: Canada, USA and Mexico can trade without customs duties

How did NAFTA impact trade between Canada and the USA and Mexico?

What was Quebec’s most important export in 2016?

Why are more businesses relocating to developing countries Why are more businesses relocating to developing countries? Which sector of the economy is most affected by relocation?

Rural Economy: growing challenges As more and more people are moving to the cities, the rural areas are experiencing devitalization: Business closures/less investment Fewer local services (schools, hospitals, local shops close down) Aging population High levels of unemployment Young people leave because there are not enough job opportunities Possible explanations of problems in rural areas: lack of economic diversity (mines closed down during recession), appeal of the city (more services and opportunities)