goldstein: canada still reeling from lost decade of economic opportunity under trudeau
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prime minister mark carney (left) and former pm justin trudeau (right).
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it’s no accident prime minister mark carney presided over the worst record of economic growth during his first year in office of any canadian pm in more than half a century.
actually, it was negative growth of 0.05% as reported by bloomberg news.
despite that, a nanos-bloomberg poll showed most canadians are satisfied with carney’s performance on the economy.
they blame u.s. president donald trump for ongoing economic uncertainty over tariffs and the uncertain fate of the canada-u.s.- mexico agreement on trade, which canada and mexico wanted to renew while trump didn’t, leading to more uncertainty as the trade deal will now be subject to annual reviews.
but the root problems in our economy have been around a lot longer than trump.
a major factor is canada’s low productivity because of weak business investment.
low productivity doesn’t mean canadian workers are lazy.
it means businesses aren’t investing in new technologies giving workers the ability to work more efficiently, leading to a more prosperous economy and higher standards of living.
in march 2024, carolyn rogers, senior deputy governor of the bank of canada, called this a “break the glass emergency.”
it means businesses aren’t investing in new technologies giving workers the ability to work more efficiently, leading to a more prosperous economy and higher standards of living.
in march 2024, carolyn rogers, senior deputy governor of the bank of canada, called this a “break the glass emergency.”
trudeau policies exacerbated problem
even the trudeau government acknowledged it during their near-decade in power, where many of their anti-business policies made the problem worse.
in her april 2022 budget speech, then-finance minister chrystia freeland described low productivity as the “achilles heel” of the canadian economy warning “we are falling behind when it comes to economic productivity.”
her budget even cited a projection by the organisation for economic co-operation and development that without reforms, canada’s real gdp per person from 2020 to 2060, would grow at the slowest rate of any of the oecd’s 38 industrialized countries.
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low productivity results from many factors including government over-taxation, over-regulation, a lack of competition and excessive and indiscriminate immigration policies.
the latter leads to businesses hiring cheap labour as opposed to finding ways for skilled workers to produce goods more efficiently, leading to higher profits, better wages and improved standards of living.
data shows business investment per worker declined
a report by the fiscally conservative fraser institute released thursday compares business investment in canada to the u.s.
while a lack of business investment resulting in low productivity in canada goes back decades — with the study by the fiscally conservative tank using data from 2007 to 2024 — it notes that it accelerated after 2014, a year prior to the start of the justin trudeau era.
according to the findings, inflation-adjusted business investment in canada per worker — including spending on equipment, machinery, factories and new technologies (while excluding residential housing construction and government projects) — declined by 18.8% from $20,310 in 2014 to $16,493 in 2024.
during the same period, inflation-adjusted business investment per worker in the u.s., in canadian dollars, increased by 31.3% from $23,263 to $30,355.
“the economic well-being of canadians depends in large part on the strength of business investment, so poor business investment is bad news for workers,” said tegan hill, co-author of the fraser institute study, comparing business investment per worker in canada and the u.s., 2007-2024.
“the waning ability to attract business investment in canada should sound alarm bells and prompt policymakers to enact immediate policy reforms to make canada a more attractive and hospitable destination for investment.”
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carney left dealing with the fallout
in a speech to the economic club in new york in may, carney said his government is “catalyzing one trillion dollars in investments in canada over the next five years”, that “foreign investment in canada is running at twice the rate of our nearest g7 peer and that canada now ranks as the most attractive country in the world for infrastructure investment.”
an april report by rbc agreed canada is back on the radar with foreign investors, but also noted, “the renewed interest comes after a decade of weak business investment, stalling productivity, and stagnating living standards. between 2015 and 2024, more than $1 trillion of investment exited canada — the largest capital exodus in canadian history. for every dollar of inward (foreign direct investment), two dollars exited’”
call it canada’s lost economic decade under trudeau.
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