Today's discussion:

Canada cannot afford another lost economic decade

The first order of business is to understand the magnitude of the challenge and the risks of not confronting it. Canadian living standards are now what they were in 2014. That amounts to a lost decade. The overwhelming imperative of our politics and policy must be that it doesn’t extend to a second decade. We cannot afford to learn of the consequences.

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Wester Ranta

The best way for Canada to to not have a further decline in its economic standing is to absolutely pummel the Liberals and NDP in the next federal election.

11th March 2024 at 9:00 am
Harriet Worden

You are so right

11th March 2024 at 2:08 pm
Paul Attics

// Canada’s population growth between Q4 2022 to Q4 2023 was over 3 percent, which is similar to that of countries like Somalia, Uganda, and Tanzania.//

Why is 3% bad…other than being similar to *those* countries?

Whatever the population growth rate is, it is bad because it is not aligned with available infrastructure to support the growth. It is the mismatch, not the rate, that is the problem…and the Federal government is responsible for this devastating mistake (for young people especially).

11th March 2024 at 8:05 am
Valerie

The rate is a problem because spending on infrastructure takes a slice of economic output that could otherwise go towards improved living standards or real investment. Even if governments invested enough in infrastructure, the amount of spending required just to run in place as the population grows cuts into the apparent economic benefits of immigration. A ‘population trap’ isn’t just about a failure to invest or a mismatch, but about the share of GDP that is required just to maintain the amount of infrastructure (and private capital) per person. At some point it’s just not sustainable, and it’s not a coincidence that Canada’s growth rate puts it on par with much poorer countries.

11th March 2024 at 11:35 am
Kim Morton

We have two major, interconnected problems. Massive immigration, lack of infrastructure. A third, call it bureaucratic inertia makes the other two worse. Controlled immigration is fine, slow advancement of infrastructure is frustrating, but can be dealt with. Especially in BC, but all across Canada our economy is running on building housing and government financed infrastructure to house and move all the newcomers around. Nowhere is there increases in private sector economy. Our current regime actively represses new economic drivers like mines, manufacturing, lumber, oil extraction, while using taxpayer money to finance dubious electric car plants than will probably never return the principle, never mind interest on our investment

11th March 2024 at 11:52 am
Harriet Worden

The sooner we get rid of this incompetent Lieberal-NDP government, the better

11th March 2024 at 2:15 pm
Rick

Another 8 years waisted with JT at the helm.Why would anyone invest in Canada with its tax on tax on tax syndrome.Carbon tax is the biggest mistake the Liberals ever made.And that’s beside the corruption in government.

11th March 2024 at 12:40 pm
Peter Lampman

“Our economy is now marked by high levels of government consumption and declining levels of business investment—particularly outside of residential construction.” As a small business owner of an engineering firm, the amount of over-regulation by the current government has caused me to not invest any more time or money in my firm. In the last ten years my firm has been hassled by CRA through three HST reviews and two tax reviews. On all occasions there was nothing found contrary to the regulations. Government over-reach into the operation of small business has become the norm. In this climate I chose to close my firm and layoff 7 employees.

11th March 2024 at 11:55 am
PDH

Like you I was a small business owner who was the subject of a supposedly random tax audit. I recall asking our accountant why it took CRA 3 years to account for income that only took me 1 year to earn. I never fully recovered from the trauma of undergoing an extensive tax audit.

11th March 2024 at 12:39 pm
A. Chezzi

“How Austerity Saved Greece.” There were other factors at play in Greece, like nepotism and graft, of which there is no mention in the article. Radical reform, a willingness to cut out the favourites, the donors, the business people looking for gifts and willing to pay for them and radical tax reform is necessary to get things under control. With inflation, we see companies, especially food chains, making egregious profits while people suffer and there is no government intervention. Poilievre talks about gate crashing but has remained quiet about food prices. His affordability slogan is just a slogan. It sounds good but he will not undertake to cut out his potential donors. His “attack” on big pharma is a fairy tale. It will take millions to take on big pharma. It would be better to spend the money on pharmacare and make sure all Canadians have affordable medicines without having to make decisions between food, rent, or meds. There is just too much polarization in this country right now and it will only get worse as the election approaches. Partisanship and mean spirited finger pointing which becomes all too personal has to end. Respect and a willingness to work together will achieve more than austerity alone. Austerity also means a willingness on the part of Canadians to do without. What are Canadians willing to do without? We live in a culture of instant satisfaction. We have had too much for too long. Are Canadians willing and capable of belt tightening like their grandparents or parents? Austerity is one part of a solution but alone it will not solve problems. Our current economic situation has many facets and calls for a multi faceted approach.

11th March 2024 at 9:19 am
Paul Attics

// In 1970, Canadian workers were 85 percent as productive as their American counterparts. In 2022, it was 72 percent. //

What do we get for this trade-off? Perhaps we get a society that is happier overall? Average 40-hour work weeks instead of 50-hour work weeks, more holidays, more vacation, etc. Labour productivity is still growing, just not as fast as the US.

Why doesn’t Canadian business invest more capital in productivity improvements and R&D? What exactly is incentivizing them to allocate profits and available capital elsewhere? Perhaps a higher tax rate would incent business to redirect more profit into capital investments to avoid the greater tax liability?

11th March 2024 at 8:42 am
Michael F

US workers also die younger, have fewer benfits like parental leave and less vacation time. They are more stressed, less happy and overworked. Is that an acceptable trade off for higher productivity? I admire a country like Bhutan that has a Gross National Happiness indicator instead of just spreadsheets and the constant business mantra of endless growth or stagnation.

11th March 2024 at 12:59 pm
Rick

Or just not investing in Canada and move profit to tax heaven.

11th March 2024 at 12:45 pm
Lauraine

It is easy to play with numbers and compare one country to another within that bubble, it takes real work and understanding of all aspects of that country to make a valid statement. Growth just for the sake of growth is so very short sighted and rigidly capitalistic. Question is, why would we want growth just for the sake of growth?

11th March 2024 at 2:58 pm
Michael F

Because that’s the investor class wants. More money. Always more money. They’ll happily destroy the planet for a good rate of return.

11th March 2024 at 3:41 pm
Valerie

Canada needs growth. But it also needs realism about demographic trends, and a wariness of getting locked into a trajectory where we need high levels of productivity growth just to meet perceived commitments. Even per-capita stagnation requires productivity increases as the relative share of workers drops. (This is not exclusively about low birthrates. Stable populations are old because people spend a lot of their lives old!)

The one-time demographic tailwind of the baby boom let many of us believe that things we enjoy were cheaper than they are. I often see people complain about getting ‘less for more’ with healthcare spending now, but in reality a system that delivers the same standard of care at an individual level has become dramatically more expensive at a population level. There were twice as many seniors relative to workers when universal healthcare and OAS were introduced than there are today. This even goes beyond public spending, and affects private pensions. Everyone effectively got to underpay while working for what they would use in retirement and we’ve gotten used to the idea that is the real cost. It’s difficult to replicate that demographic magic with just productivity growth. In the long run, growth will get us out of a lot of zero-sum dynamics. In the short-run, there are difficult trade-offs about how to transition from a very growth-dependent system to a more stable baseline. That rebalancing may feel like a loss.

11th March 2024 at 1:16 pm
Michael F

The fact that people believe Poilievre when he makes a speech saying he woun’t cater to corporate lobbyists and promote their interests is unbelievable when all you have to do is look at the guy’s schedule. Last week he was at another private fundraiser in one of the wealthiest neighbourhoods of Toronto. Who do you think attends these $2000 a plate fundraisers? The average working Joe?

11th March 2024 at 1:09 pm