CEO Council Chief Executive Outlines Key Short-Term and Long-Term Priorities for Canada

January 21, 2009

Addressing the New Year Members’ Meeting of the Canadian Council of Chief Executives (CCCE) in Toronto, Council Chief Executive and President Thomas d’Aquino outlined top priorities that he said should be front of mind for government and business leaders alike as Canadians confront the difficult and uncertain year ahead.

“Countering the recession is our number one priority,” Mr. d’Aquino said.  “Events beyond our country’s control have rocked global financial markets, damaging consumer and business confidence around the world.  Canada cannot escape the consequences: our economy must deal with the daunting challenges as our families and communities face real pain.  No matter what we do, the economic situation will get worse before it gets better.  Accurate predictions about the timing of the recovery are impossible to make.  Canada is part of an economic universe that for the time being is without a compass.”

Given the sober economic realities, Mr. d’Aquino said Canada more than ever needs an effective counter-crisis strategy.  “On the positive side, Canada is entering this period of economic turmoil from a position of relative strength.  Our governments have been running budget surpluses and paying down debt.  Our national pension system is well-financed and solvent.  We continue to sell more to the rest of the world than we buy. Inflation and interest rates have been low and are dropping further.  Our financial institutions are sound. Canadians are among the best and brightest in the world in terms of skills and education.  Our unemployment rate may be rising, but it remains close to its lowest point in more than three decades.”

The CCCE is Canada’s senior business association, composed of 150 chief executive officers and leading entrepreneurs from all major sectors and regions of the country.

Guests at the January 19-20 CCCE meeting included: The Right Honourable Stephen Harper, Prime Minister of Canada; The Honourable Tony Clement, Minister of Industry; The Honourable Jim Prentice, Minister of the Environment; Michael Ignatieff, Leader of the Official Opposition and Leader of the Liberal Party of Canada; The Honourable Scott Brison, Liberal MP; and The Honourable John McCallum, Liberal MP.  Representing the Province of Ontario were The Honourable Dalton McGuinty, Premier, and The Honourable Michael Bryant, Minister of Economic Development and Government House Leader.

The meeting also included a special salute to the Canadian Forces, in the presence of: General Walt Natynczyk, Chief of the Defence Staff; retired General Rick Hillier, former Chief of the Defence Staff; and representatives of the Army, Navy and Air Force, together with members of their families.

In his remarks, Mr. d’Aquino noted that the deep recession in the United States has sharply reduced Canadian exports of goods and services and weakened global prices for Canadian resources.  Yet Canada’s relatively strong economic base and more than a decade of fiscal discipline have left governments in a position where they can afford to increase spending temporarily to blunt the crisis.  “The gravity of Canada’s economic situation justifies a substantial increase in public spending even if this leads to temporary deficits,” he said.

“Governments must focus on two priorities: helping Canadians cope with the short-term damage, and positioning Canada for a rapid return to growing employment and rising incomes.  On both fronts, stimulus measures must be temporary, must be cost-effective and must boost consumption and business investment quickly.  This requires careful policy choices, a continuing rigorous review of the effectiveness of existing programs and a clear plan for moving budgets back into surplus as quickly as possible.  Canadians have learned from bitter experience that entrenched deficits are a recipe for years of rising taxes and brutal cuts in public spending.  We must not go down that road again under any circumstances.”

Mr. d’Aquino recommended that temporary spending on the part of the federal and provincial governments should focus on fast results in five priority areas:

• Accelerate public infrastructure development

• Help the unemployed

• Enable business innovation

• Encourage personal consumption

• Support charities and communities

“I am encouraged by the signals that emerged from the meeting of the First Ministers in Ottawa last Friday where there appeared to be a consensus for action around these priorities,” Mr. d’Aquino said.  “At this time of severe economic difficulty, there is both an urgency and expectation that our collective political leadership, including government and opposition forces in Parliament, will put aside partisanship and focus on what is best for the country.”

While fighting the deepening recession must be the primary focus of government and business leaders alike, Mr. d’Aquino stressed that it is essential to move forward with a nation-building agenda.  “With our feet to the fire, I believe that collectively we will be better motivated to act on a number of fronts.  For example, the June 2008 report of the Competition Policy Review Panel makes it clear that there is much that Canadians can and must do if we want to enjoy a rising standard of living and quality of life.  The December 2008 report of the Advisory Panel on Canada’s System of International Taxation provides a detailed blueprint for revenue-neutral tax changes that would both encourage more foreign investment in Canada and enable more businesses to grow globally from bases in Canadian communities.”

Mr. d’Aquino listed 10 transformative priorities that are high on the CCCE’s list for urgent action:

1. Talent. Access to education and training is essential for equality of opportunity and to ensure a competitive labour force, while attracting and integrating immigrants will be vital in meeting the needs of an increasingly labour-short economy in the years ahead.
2. Entrepreneurship. Canada must vigorously encourage both the startup and growth of new businesses. Potential tools include access to startup and expansion loans, encouragement of angel investors and venture capital, further relief on the taxation of capital gains, support for exporters, and clear and simple regulatory requirements.
3. Taxation. Corporate tax rates determine where companies choose to invest internationally, while personal tax rates affect the ability of Canadians to get ahead and to invest in a better future. Responsible and carefully timed reductions to both corporate and personal income tax rates are essential.
4. Innovation. Canadian governments invest heavily in research, but our country needs to increase business investment in research and development, in the commercialization of new ideas and in the deployment of new technologies in the workplace.
5. Infrastructure. The quality of Canada’s public infrastructure affects competiveness in many ways and as a country we are slipping. Long-term investment plans should include public transit, transportation networks, border crossings, ports and airports, technology and telecommunications infrastructure and energy distribution and development.
6. Regulation. The federal government must deliver on its promised 20 percent reduction in the administrative burden of regulation. Provincial governments must follow through on their commitment to the open movement of people, goods, services and capital within Canada.
7. Environmental leadership. As the CCCE has urged, Canada should aspire to be both an energy and an environmental superpower. We have the resources, the human talent and the motivation for being a world leader in the development of sustainable technologies. Urgently needed is a marriage of coherent and sound public policy with entrepreneurial know-how.
8. Canada-United States opportunities. The inauguration of President Obama in the United States creates an important opportunity to explore bold new ideas for working together to promote high-value job creation, trade, investment, and technological progress. This agenda includes re-inventing the border, building deeper synergies between Canadian and American companies and our workforces, deepening cooperation in energy security and environmental sustainability, improving ways of dealing with bilateral economic disputes, and working together to promote global peace and security. (The CCCE will convene its 2009 Washington CEO Summit in the United States capital on March 23 and 24.)
9. Global reach. Canada’s future depends on open global flows of goods, services and people, and as Canadians we must continue to pursue this goal multilaterally through the World Trade Organization and regionally and bilaterally with key trading partners including the European Union, China, India and Japan. We must step up our efforts to fight the scourge of protectionism, the greatest threat to long-term prosperity in Canada and globally.
10. Transforming the world order. Countries around the world must pursue responsible and creative ideas and solutions to address the global economic crisis, the failure of major financial houses, growing unemployment worldwide and the sharp decline in confidence in the ability of global institutions to manage growth and deliver its rewards to people in an orderly way. Canada has an important contribution to make and must be a player in the transformation that is underway.

Founded in 1976, the CCCE is a not-for-profit, non-partisan organization committed to making Canada “the best place in the world in which to live, to work, to invest and to grow”.

In addition to Mr. d’Aquino, the members of the CCCE’s Executive Committee are:  Chair, Gordon M. Nixon, President and Chief Executive Officer, Royal Bank of Canada; Honorary Chair Richard L. George, President and Chief Executive Officer of Suncor Energy Inc.; and Vice Chairs Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Hartley T. Richardson and Annette Verschuren, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., James Richardson & Sons, Limited and The Home Depot Canada and Asia.