Toward a National Economic Strategy
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Toward a National Economic Strategy 1 2020 Thank you to our report sponsors 2 A special thank you to the Canadian business leaders who shared their ideas and insights at the Canada 360° Economic Summit: Hon. Perrin Beatty, PC, OC, President and CEO, Jackie King, Chief Operating Officer, Canadian Chamber of Commerce Canadian Chamber of Commerce Guillaume Bouthillier, Head of Global Partnerships, Amanda Lang, Anchor, BNN Bloomberg Bombardier Transportation Mairead Lavery, President and CEO, Ian Bremmer, President and Founder, Export Development Canada Eurasia Group Mark Little, President and CEO, Suncor Sean Brett, Senior Vice President of Power and Storage, TC Energy Phil Noble, Board Chair, Canadian Chamber of Commerce Heather Chalmers, President and CEO, GE Canada Tomi Poutanen, Chief AI Officer, TD Bank Chris Denys, Senior Vice President of Possibilities James Rajotte, Vice President of Provincial and and Digital Health Solutions, Sun Life Municipal Government Relations, Rogers Communications Dawn Desjardins, Deputy Chief Economist, RBC Rocco Rossi, President and CEO, Ontario Michael Doughty, President and CEO, Chamber of Commerce Manulife Canada James Scongack, Executive Vice President of Greg Engel, CEO, Organigram Corporate Affairs and Operational Services, Bruce Power Ginny Flood, Vice President of Government Relations, Suncor Jad Shimaly, Chairman and CEO, EY Canada Sabrina Geremia, Head of Google Canada Robin Silvester, CEO, Port of Vancouver Philippe Jette, President and CEO, Cogeco Trevin Stratton, Chief Economist and Vice President of Policy, Canadian Chamber of Commerce Shannon Joseph, Vice President of Government Relations, Canadian Association Karen Swager, Senior Vice President of Potash, of Petroleum Producers The Mosaic Company Bilal Khan, Managing Partner and Head of Peter Tertzakian, Managing Director and Chief Deloitte Data Energy Economist, ARC Financial Corporation Garrick Tiplady, Head of Facebook Canada 3 On January 30, 2020, we convened some of Canada’s greatest business minds, all coming together with a common purpose: to find and develop new ideas to stimulate our economy. This was the genesis for the inaugural Canada 360° Economic Summit, so named because we understand that every Canadian and every business leader has a stake in our shared economic future. Our objective was to bring together a plurality of views, opinions and insights to help guide the growth and direction of the Canadian economy. Like any economy in the world, Canada has challenges and advantages, and we considered both in our discussions. For all of our problems, we remain the most fortunate people on the planet. Our quality of life is exceptional. We have an abundance of natural resources that remains the envy of the world. We have one of the most educated workforces among the G7. However, for all of the advantages that we enjoy, we cannot take them for granted. We asked business leaders the big questions about how the economy is changing underneath our feet and how can we best position Canada. These discussions focused on three main areas: Canada’s declining levels of competitiveness, Canada’s place in the world amidst a changing global economy and Canada’s role as a nation of innovators in an increasingly disruptive economy. Our Innovation Economy panel discussion featuring leaders from Google Canada, Deloitte Data, Facebook Canada, Sun Life and Bruce Power. Based on these discussions, the business community identified eight priorities to attract investment to Canada, help create jobs and grow and strengthen our communities: • A regulatory system that works for everyone, including business. • Infrastructure and innovation to make Canada the most connected country in the world. • A workforce with the skills, education and training to prosper. • Access to new markets around the world and the elimination of trade barriers at home. • A tax system that is fair, efficient and modern. • Resources to help small- and medium- sized businesses grow and succeed. • Addressing climate change by lowering emissions and increasing energy supply. • A healthier pharmacare system for healthier Canadians. This report details what we heard directly from Canadian business leaders about the issues they are facing on the ground and what this means for our economy and our country. The challenge now is to ensure our governments have the vision, the principle and the strength of purpose to achieve our economic potential both here at home and in our relations with the rest of the world. Canada urgently needs a comprehensive national economic strategy focused on these priorities. 4 Our Global Economy panel discussed featuring leaders from The Mosaic Company, Port of Vancouver, Export Development Canada, Organigram and Bombardier Transportation. Canadian Competitiveness: What We Heard Canada ranked in the top 10 in the World 2019 compared to 1.8% in the U.S. Meanwhile, Economic Forum’s (WEF) Global Competitiveness Canada’s GDP per capita decreased by 3% since Rankings in 2010. Our ranking declined steadily 2010, while the U.S. saw a 35% increase over the since then, falling to 14th in 2019. past decade. Business leaders have somewhat more negative Long-standing structural issues continue to hamper views across several dimensions in our competitive growth. Foremost among these are interprovincial landscape. Canada ranks 26th in creating a trade barriers. Canadian household balance stable policy environment for doing business and sheets remain highly leveraged, which will hamper 38th in having a long-term economic vision in consumer spending this year. A split is also place, according to WEF. emerging among Canadian households, with a third of households having no debt compared to Productivity growth and growth in GDP per capita, a wedge of very highly indebted households. The the economic output per Canadian, is anemic. number of unfilled jobs also remains stubbornly Canadian productivity growth has diverged from high amidst labour mobility challenges. U.S. levels for the entire decade—year-over- year productivity growth was 0.3% in Canada in Our CEO Competitiveness panel discussion featuring leaders from GE Canada, Manulife Canada, Suncor, EY Canada, and Cogeco. 5 BNN Bloomberg’s Amanda Lang moderating a Q&A with RBC’s Vice President and Deputy Chief Economist, Dawn Desjardins. What does this mean for Canada? While governments all share the Canada can create more Our collective challenge goal of economic growth, they economic resilience in its is to continue to increase must be more thoughtful in the education system by focusing on energy supply while lowering way they work with Canadian critical thinking and creativity, in emissions. As the pace of companies to help remove addition to important science, global commerce continues barriers to private investment. technology, engineering and to accelerate around the These barriers include overly math (STEM) skills. Canadian globe, Canada’s ability to complex regulatory systems, companies are often punching export its energy has continued interprovincial trade barriers below their weight when it to slow. For instance, major and a burdensome tax system comes to talent and must do energy project approval in that discourages investment a better job of continually Western Canada takes a and business expansion. Given upskilling their employees decade and repeatedly needs the limited fiscal capacity of the and working with educational amendments to accommodate federal and provincial/territorial institutions. the technological and market governments, addressing changes over the review period. regulatory issues is a low-cost Canada should continually way to generate growth. improve its skilled workforce A key takeaway for Canadian Canada can also maximize the by bringing the right talent to companies and policymakers value of all communities with Canada through immigration, alike is that in a rapidly changing initiatives such as increased facilitating labour market economy, governments and Indigenous procurement — one matchmaking between businesses must adapt to market area where governments can talent and companies and changes while capitalizing on learn from the leadership of the emphasizing re-skilling in a Canada’s existing strengths. private sector. changing economy. Ensuring Business must be more vocal uninsured and underinsured with governments and the Succeeding in a changing Canadians have access Canadian public about the links economy also requires a more to pharmacare will be an between productivity and our adaptive and resilient Canadian important factor in maintaining well-being and governments workforce. Canada must be a healthy workforce. must be more proactive in more creative with its education reducing the friction to doing systems to fill today’s skills gaps Energy supply is also crucial business in Canada. while anticipating the needs of to increasing the standard of tomorrow. living of the global population. 6 Canada’s Place in a Global Economy: What We Heard A “geopolitical recession” created a G-zero world, Uncertainty will persist in 2020, with a rough start where no single country or group of countries has to the year because of tensions in the Middle East the ability and will to drive a truly global agenda. and coronavirus. The U.K.’s changing relationship with the European Union and the prospect of a A key theme in this G-zero world is the fraught U.S.-China Phase II trade deal also remain on the U.S.-China relationship, which has passed a tipping horizon and will continue to evolve throughout