OTTAWA - Canada has a monumental opportunity to profit from a commodity price "super-cycle" that will last for years, says Bank of Canada governor Mark Carney, and all regions of the country can prosper.
In an event at Ottawa city hall Friday, the bank governor spelled out in greater detail his views on Canada's economy of the future, where commodity exports to the emerging world plays a central role, but opportunities spread beyond the oil-rich West.
If Canadians develop their commodity riches well, adding value through development of energy- efficient technologies, the country has a bright future in the new 21st century economy, he said.
"We are in a demand driven commodity super-cycle ... (and) in our opinion this is going to go on for some time," he said.
"In a world where commodity prices are going to be elevated, it's better to have commodities."
Carney has talked about "broadening" and "deepening" Canada's commodity play on several occasions in the past few weeks, but Friday's presentation to about 300, including Ottawa business executives, was his most expansive and suggests he is warming to the subject.
As he told a Senate committee on Wednesday, most of the decisions that would put Canada in position to benefit from high commodity prices rest with the private sector. But his advocacy for "sustainable" development also appears a subtle prod on governments not to overlook the importance the green economy.
"Sustainable development obviously (requires) a variety of appropriate environmental regulations...these are decisions for federal and provincial governments," he said.
"What is clear is that the emerging market opportunity is far broader than in the commodity opportunity."
Canada needs to take advantage of the opportunity presented by the profound urbanization taking place in the emerging world, particularly China and India, that will keep demand and prices for resources high, he said.
He added that direct exports of oil, gas and minerals is only the starting point. There are also tremendous opportunities to add value to resource extraction, by developing green technologies and efficiencies that can benefit Canadians at home and be exported.
"When you think about energy efficiency ... in terms of green technology, energy efficiency, building efficiency, these are things necessary here given (high) prices, but they are massive export opportunities," he said.
"Our calculations are that about 85 per cent of the resource productivity opportunities that measure in the $3-$5 trillion range over the next couple of decades are resident in emerging markets."
That's why, he said, he has been urging Canadian corporations to look to emerging markets, since the U.S. and Europe will be hobbled by debt problems for years.
Currently, they are too heavily invested in advanced economies, shipping 85 per cent of exports to the slow-growing world and only eight per cent to the fast-growing markets.
While the West and other resource-rich regions will be the biggest winners, the rest of Canada can also get in on the bonanza, he said.
Manufacturers in the East can capture some of the wealth by supplying capital equipment and engineering services needed in resource development. He noted that currently one in 12 of the supplies going into the oil sands come from Ontario.
And a "substantial" proportion of wealth is spread across the country through Ottawa's taxing of corporations and workers in the resource sector, he added.
"Don't forego these commodity opportunities, they are going to persist, this isn't a temporary thing," he said.
On current economic conditions, Carney reasserted his belief that the Canadian economy will grow by 2.4 per cent this year and next, but that risks remain.
In particular, he said while Europe is expected to emerge from its double-dip recession in the second half of 2012, the continent faces a long, slow recovery. Before it emerges from his its debt quagmire, he predicted European workers will need to accept "real wage reductions."
The U.S. is moderately better off, he said, but its recovery will be the weakest since the Great Depression because it will take years to rebuild household wealth lost during the crisis.