On the eve of his moving eulogy to George H.W. Bush, former Prime Minister Brian Mulroney delivered a very provocative speech at the Franklin Templeton 2019 Global Market Outlook event.
Barbara and I were fortunate enough to hear the address in person. Our first impression was of a man very much on top of his game and in sync with what’s happening in Canada and around the world.
One theme of Mr. Mulroney’s speech was the lack of progress on pipelines – a subject that deserves to be at the top of investors’ minds.
First off, we have to acknowledge that we live in something of a bubble here in the GTA. The city is booming with investment in the knowledge economy.
But we can never afford to overlook the fact that Canada remains a resource-based economy. We may not like that fact. But we have to live with its implications.
All you have to do is look at your portfolio to see the importance of the resource sector to all our financial health. Whenever resources are under attack and commodity prices are diving, your portfolio follows suit.
If you look at so many of the largest mutual funds in Canada, they are saturated with resource stocks. Commodities represent 42% of the total value of the TSX Index.
So we’re all in this together.
It was refreshing to hear a politician free to tell it like it is without fear of public pushback. So what was his message? It was labelling the oil pipeline capacity issue as a crisis. He talked about enlisting First Nations, environmental groups and Premiers together to overcome existing obstacles. Or, he warns: “Otherwise we keep in the ground 175 billion barrels of oil that should be benefiting all Canadians across the country.”
This is a terrible quandary we’re in as a country. Our oil is suffering from a massive discount in the open market due to a pipeline shortfall.
It isn’t fair to label this simply an Alberta problem – it’s a problem that touches all Canadians. If we’re going to prosper long-term we need to look for solutions, not hide our heads in the sand.
I thank Mr. Mulroney for giving us all such a powerful wake-up call.
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Thanks for reading,
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