It's just a matter of time.

Economic stress has a way of motivating policymakers to make jurisdictions more regulatorily friendly.

Primarily as a result of the collapse in oil investment, capital is flowing out of Canada at the fastest rate of any country in the developed world. According to BofA/Merrill Lynch, over the past year, Canada went from having an inflow of money equivalent to 4.2% of its GDP annually, to an outflow of money equivalent to 7.9% of its GDP. Benjamin Reitzes, a Bank of Montreal economist, disputes BofA/Merrill Lynch’s numbers. According to Reitzes, the outflow of money is at 3.4% of GDP currently, not 4.2% as BofA had calculated. And a year earlier, it had already been negative, with money flowing out of Canada at a rate of 1.1% of GDP.

But, from this lay person’s perspective, whether Canada’s net capital outflow is 3.4% of GDP or 4.2% of GDP doesn’t matter too much; either way, it’s bad for Joe Six-Pack Canadians.Such net capital outflow will likely cause a cascading number of layoffs, as well as the popping of the residential real estate bubble(s) in Canada and its attendant effects. Sooner or later, this net capital outflow will cause the masses to demand policies that attract capital investment, and, by extension, local jobs. Canadian provinces will likely compete with each other to attract new capital investment. Hopefully, NWT policymakers will be early movers.