The newly-elected Liberal authorities’s prime precedence must be
elevating Canada’s productiveness
, based on former Financial institution of Canada governor
David Dodge
.
“Progress is the important thing factor for this authorities,” he mentioned in a
latest interview
with the Monetary Put up’s Larysa Harapyn. Nevertheless it gained’t come simple.
Dodge mentioned that Canada has gone by the final 15 years with basically no improve in productiveness or within the common earnings of employees.
“The important thing goal is to reverse that, and reverse that at a time that will likely be very troublesome,” he mentioned.
Canada is at present going through extra limitations to its exports because of
United States President Donald Trump
‘s on-again, off-again
tariffs
. Nevertheless it should not let that cease it from making investments that may permit it to develop, Dodge mentioned.
The specter of a looming recession is one other problem going through Canada’s economic system.
“Whether or not it finally ends up being a recession or whether or not it ends simply being a interval of ultra-low development on the earth … that makes the job of elevating productiveness right here in Canada much more vital,” Dodge mentioned.
And it’s not simply Trump’s tariffs that may decelerate Canada’s financial development, however a spread of his different insurance policies, based on Dodge.
“(Trump) has an actual influence on the worldwide financial development, on financial development in the USA and inevitably then, on us,” he mentioned.
The slowing economic system will even have an effect on the
Financial institution of Canada
‘s financial coverage, however Dodge expects solely a small discount in
rates of interest
over the subsequent 12 months.
“We’re already within the impartial vary on rates of interest,” he mentioned. “The Financial institution of Canada will cope.”
Now the economic system is within the fingers of the federal government, Dodge mentioned.
“The massive levers of macroeconomic coverage are with the federal government, not with the financial institution,” he mentioned.
Dodge mentioned that one approach to increase productiveness is by encouraging innovation, notably in know-how and power.
“Tech is the path to greater productiveness,” he mentioned. “That’s completely essential.”
The federal government’s function in that’s to construct infrastructure for companies to facilitate elevating productiveness and making funding extra worthwhile, he mentioned.
“We’ve got the expertise and we now have the assets,” Dodge mentioned. “The difficulty is to make sure that governments — federal, provincial and native — don’t create limitations to creating these investments.”
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Dodge added that Canadians will even should restrain their consumption as a way to launch the assets for the funding wanted to boost productiveness and incomes.
“That’s the highway forward,” he mentioned. “It’s not a really nice highway as a result of ultimately, we’re going to collectively, as a nation, have to avoid wasting extra, we’re going to have to speculate extra.”
• E mail: novid@postmedia.com
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