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Staples theory GGR221.docx

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Deborah Leslie

resource sector of the economy- staples theory- harold innis trade between Canada and the US is the highest in the world. Harold Innis (an economic historian): • had a lot to say act canada's history and its relationship with the US. • he thought that we were the ones that provided raw materials to other wealthy countries, first england and france, now the US • through staples theory, canada's history can be read , how canada provided resources like fish, timber etc. we're highly export driven. heavily oriented with export of staple products • staple: a principle item of trade or consumption produced and consumed by a society - minimal amount of processing to the raw material (unprocessed or semi-processed) • economy heavily dominated with export of raw and semi processed materials to a more advanced manufacturing economy • growth is considered a process of diversification around that resource • growth emanates from the resource sectors and grows into other sectors Types of linkages:: • backward linkage- linkage to any kinda firm that provides resources for that production process. • forward linkages- there will be linkages to other firms that buy things that you're making. e.g.: selling wood to firms that manufacture furniture. or turning pulp into higher quality furniture • final demand linkages: once u have a vibrate resource demand sector- those sectors will stimulate growth in other industries/sectors. • fiscal linkages: most resource industries pay rents, forest- stoppage fees(royalties)- like govt uses those funds to stimulate the economy, infrastructure. Impediments stem from staples production:: • resource firms often maintain an export oriented mentality : no incentive to further develop because they already make enough profits, its easier • not many companies can afford to enter the competition cause is expensive, hence firms are often large, oligopolistic, foreign • staples trap: once a region specializes in producing staples, it finds it very difficult to reconfigure production into other types of sectors of the economy…thus the economy becomes overly dependent upon some resources and cannot diversify even though we're a staples economy- we're till a very rich economy staples economies are very susceptible to the prices that they set…highly sensitive to prices in the market, demand and financial crisis cyclonics: metaphor of cyclone (boom-bust dynamics) every staple is unique (i.e. trees take long time to grow and fishing is seasonal), each staple has its own rhythm and timing then this develops different towns like a fishin
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