Robust economic growth can no longer be taken for granted - Advice to Canada's New Federal Government to Strengthen Canada's Prosperity
Ottawa - The next federal government will have to address some big economic and social issues affecting Canadians. A new briefing released today by The Conference Board of Canada offers research-based advice on how Canada's economic growth performance and potential can be strengthened through policy reform.
"Robust economic growth and related growth in government revenues can no longer be taken for granted," said Daniel Muzyka, President and CEO, The Conference Board of Canada and co-author of the briefing. "The new federal government has the opportunity to define the priority economic policies that would best respond to changing trends such as demographics and globalization with a view to strengthen Canada's growth potential."
• Demographic forces and slower labour force growth are dragging down the growth capacity of Canadian economy. Globalization poses an unrelenting competitive challenge.
• Structural fiscal measures -- the design of the tax system and the evolving allocation of overall public spending -- can help offset some of the negative impact of aging demographics and build the growth capacity of the Canadian economy.
• The wider economic policy agenda should: foster innovation and productivity; encourage Canadian firms to grow to their full potential; embrace active engagement in international trade and investment; enhance Canada's competitiveness through domestic policy reforms; and increase investment in public infrastructure.
The briefing outlines seven key issues which could impede Canada's economic growth potential:
1. Demographic and workforce aging
2. Fiscal policy and the budget
3. Innovation and productivity
4. Business growth
5. Global trade policies
6. Domestic economic development
7. Public infrastructure investment
In an effort to address these challenges, the Conference Board makes, among many others, the following recommendations to the new federal government:
• Aim for continued decline in the federal debt-to-GDP ratio when the economy is growing, to rebuild the capacity to add fiscal stimulus during recessions.
• Offset some of the negative impact of aging demographics on growth with structural changes to the design of the tax system.
• Create an independent, arm's-length commission to examine options for structural fiscal reform that promotes stronger, greener economic growth.
vPursue a comprehensive pan-Canadian innovation strategy that promotes business investment and the commercialization of ideas.
• Encourage new and continued growth of larger new enterprises and help more successful SMEs compete globally.
• Continue to develop and implement innovative approaches to labour force development and the full integration of immigrants into Canadian society.
• Undertake domestic policy reform such as the elimination of internal trade barriers to the strengthen Canada's competitiveness.
• Evaluate and then implement the various negotiated trade partnership opportunities, notably the TPP.
• Put a price on carbon and combine with strong regulations to nudge the Canadian economy toward cleaner technologies and greener growth.
vTake a leading role in negotiating international greenhouse gas targets.
• Increase investment in public infrastructure with a multi-year plan, better coordination with provinces and cities, and improved financial innovation.