As Russia continues its invasion of Ukraine, the ongoing conflict has left resource gaps for commodities such as wheat and oil 鈥� but it鈥檚 not straightforward for Canada to fill those gaps immediately, according to Deputy Chief Economist at Scotiabank, Brett House.
鈥淭here is a possibility to ramp up production, both in the oil and natural gas sectors, and in the wheat and other soft commodities sectors, but we can鈥檛 do that instantly,鈥� House told CTV鈥檚 Your Morning on Thursday.
鈥淲e need more infrastructure in order to do so, we need more export infrastructure in order to get that production out of the country, and we would actually need a longer term plan around planting and land in order to actually realize those possibilities.鈥�
He noted that oil prices would have been higher now regardless of the war in Ukraine because the pandemic cut into travel and we are starting to see a bigger return to that.
In the past, when there was an oil crisis in the 1970s, he said, we saw a 鈥渕assive increase in efficiency鈥� in those following decades.
鈥淭he longer term solution here truly is greater efficiency and renewable energy sources, but there is an opportunity to fill some of that gap because our exports are so similar to Russia鈥檚 in the medium term over the next few years,鈥� he said.
Wheat is the other big issue concerning experts right now.
Russia is the world鈥檚 top exporter of wheat, with Ukraine also in the top five, according to the UN Food and Agriculture Organization, meaning the war is hitting this sector hard.
Canada is the third largest exporter of wheat, but it will take planning and time to see if Canada can fill any of the gap left behind by Russia and Ukraine.
鈥淚t requires some really tough and really important coordination amongst multiple levels of government and industries together, so partnerships are going to be playing a key role in that,鈥� House said.
鈥淭here is the possibility there over the longer term, over the next few years, to plant more intensively, to plant different types of crops, and a different variety of crops that could allow us to meet some of that demand, but again the world is facing a major shortfall in terms of the food products that we鈥檙e looking for as a result of Ukraine and Russia being knocked out of their national markets. And that鈥檚 going to be a tough situation both for consumers and for prices over the next year.鈥�
