Canada’s Business Leaders Want to Work to Improve Canadians’ Lives – Article by Thomas d’Aquino in The Hill Times

February 27, 2006

Canada’s business leaders want to work to improve Canadians’ lives – Article by Thomas d’Aquino in The Hill Times, February 27, 2006
 

Canadians are clearly tired of the name-calling and finger-pointing that too often characterized the last Parliament. They want this new minority Parliament to work.

Canada’s business leaders are confident that a great deal can be accomplished in the months ahead and we are determined to do our part in working with all parties to support measures that could make a real difference in improving the lives of Canadians in the decade ahead.

In a statement last June titled Canada First! Taking the Lead in a Transforming Global Economy, we suggested that what really matters to Canadians as individuals, as families and as a nation is not where political parties stand in the polls from one day to the next, but what kind of a country our children will inherit over the next generation. We said that Canadians must work together to deal with the threats and opportunities our country faces and to forge a new strategy for our country.

A vibrant and globally competitive economy is not an end in itself, but it is our economic progress that gives us the means to do more for ourselves and our families, more for our less-fortunate fellow Canadians, and more for those in need beyond our borders. Absent strong economic growth, our social programs will wither, our cultural institutions will be diminished, and our children will grow up in a world with fewer opportunities. Internationally, Canada’s ability to be a positive force for peace and democracy will decline.

“So what?,” some people might ask. Our economy today is in overall good shape, and we are the only major industrialized country enjoying consistent surpluses both in its federal budgets and in its trade and current accounts. So what is the problem?

The answer is obvious to anyone who compares Canada’s productivity growth to that of our major trading partners and competitors. Other countries are passing us by in raising their standards of living because they have found ways to attract more investment, generate higher returns and create more jobs that pay higher wages. Over the past five years we have lost 200,000 manufacturing jobs, in part due to the higher dollar and intensifying competition from developing economies such as China and India. In every sector, Canadians are feeling pressure to specialize and to shift toward higher value-added activities in order to protect the jobs, social services and the high quality of life that we take for granted.

Fixing these problems will not be easy. It will require a concerted effort by leaders in our governments, in our businesses and in our communities.

Recently, in a report titled From Bronze to Gold: A Blueprint for Canadian Leadership in a Transforming World, the Canadian Council of Chief Executives put forward a range of proposals that would strengthen Canada and improve our ability to compete within an open global economy. Among these, we highlighted five “creative leaps” that we believe deserve consideration – such as transferring the GST to the provinces to address the fiscal imbalance; shifting the personal income tax structure toward a consumption base; and adopting the principle in federal policy of supporting individual Canadians regardless of where they live.

Not every Canadian will support every one of these ideas. It will take time to build consensus around a new national economic strategy – to move from broad ideas to effective action.

In the short term, however, there is still much that we can do to forge a more creative and productive economy. In From Bronze to Gold, we make 10 specific recommendations that should be capable of winning cross-party support in the new Parliament. Together, these measures would lead to meaningful progress in enhancing Canada’s ability to compete for people, ideas and investment:

1. Start with families and communities. If Canada is to succeed in forging a creative economy, we cannot afford to waste the talents of a single Canadian. In this context, Canada needs to reduce the financial burden of raising children and preparing them for productive lives as global citizens. The federal government should start by reducing the steep clawback provisions of the Canada Child Tax Benefit that penalize families with modest incomes and by providing new support for child care, whether in the home or in institutional settings.


2. Learn from our children’s schools. The need for good information about educational performance is critical to economic competitiveness as well as to individual opportunity. Provincial governments should take the lead in assessing how well students and schools are doing and sharing this information as widely and completely as possible. The federal government should assist, and Canada’s private sector should be prepared to do its part.


3. Help immigrants do better, faster. The importance of maintaining strong flows of skilled immigrants is widely understood, and the barriers to more effective integration of immigrants into the labour market are well known. What is needed is coordinated action at both the federal and provincial level.


4. Turn creative ideas into businesses. The federal government has poured billions of dollars in new funding into university research in recent years. Now the emphasis is on how to turn more of the discoveries flowing from this research into viable businesses. The interim report of Industry Canada’s Expert Panel on Commercialization identified a series of measures that could be taken to improve Canada’s performance. We support its call for a business-led body to review and make recommendations on proposals for new programs and changes to existing programs.


5. Forge an environmental advantage. Canada has a responsibility to make the best use of its natural wealth. Canadian businesses need to expand their efforts to develop and deploy new technologies for reducing the impact of their production on the environment. Public policy should encourage greater conservation and waste reduction as well as more investment in renewable energy and innovative environmental technologies.


6. Develop a Canadian energy strategy. Canada needs a new national energy strategy that addresses the needs of both energy consumers and producers, and uses competitive market forces to expand the supply of the full range of energy forms.


7. Cut the cost of regulation. The Canadian Federation of Independent Business estimates that the cost to business of complying with regulations is at least $33 billion a year. The federal Smart Regulation initiative has opened the door to a new, more efficient approach in Canada. Keeping the cost of compliance as low as possible is essential in maintaining high regulatory standards within a competitive economy.


8. Invest creatively in infrastructure. A country’s productivity and prosperity are strongly linked to the quality of its physical infrastructure, including roads, railways, airports, seaports and border crossings. Canada has the resources to catch up with its infrastructure shortfall and prepare for future growth..


9. Cut taxes on investment. Tax policy should encourage people to invest in businesses and businesses to invest in growth. Personal tax rules therefore should do more to encourage savings. At the same time, the federal and provincial governments must work together to reduce Canada’s effective marginal tax rate on business investment, which is now one of the highest in the world.


10. Repair the Canada-United States relationship. Friendship and respect are the hallmarks of Canada’s relationship with its closest neighbour and largest trading partner. It is in Canada’s fundamental interest to pursue agreements that will keep our border with the United States as open as possible, and this requires hard work on issues related to security as well as the meat and potatoes of economic linkages.

As these 10 recommendations make clear, the task of strengthening Canada’s economic base will require coordinated action on many fronts. The time to start is now.

Thomas d’Aquino is Chief Executive and President of the Canadian Council of Chief Executives (www.ceocouncil.ca).