Canada's economy still operating 'below potential' as country faces range of issues, report says
OTTAWA—As Prime Minister Justin Trudeau and the new federal cabinet reverse several of the highly-controversial policies of the previous political regime, and the government as a whole prepares to begin tackling some of the most-pressing issues affecting Canadians, the Conference Board of Canada is warning the new government that robust economic growth and increasing government revenues “can no longer be taken for granted.”
“Economic growth has been steady but mediocre over most of the last five years and is not expected to accelerate much in the future,” Daniel Muzyka, president and CEO of The Conference Board of Canada and co-author of a new report that highlights how Canada can reach its economic potential, said.
“Canada’s population and workforce are aging, and baby boomers are retiring in growing numbers. Canada’s track record on productivity growth—one way to offset the impact of aging demographics—is dismal. Not all Canadians have adequate savings for retirement, and an aging population will put inexorable pressure on the health care system. Few of these issues were discussed or debated in detail during the election campaign, but a new government can hardly avoid having to address them,” he added.
Among the headwinds the new federal government must navigate are slow labour force growth, fiscal policy and budget issues, as well as “unrelenting” competitive economic challenges as a result of increased globalization.
“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,” Muzyka said.
To address these challenges, the research institution highlighted a number of recommendations for the new majority in Ottawa: