Categories: BusinessPolitics

Internal Finance memo shows Canada heading for slower growth

An article posted on the CBC has found that Canada’s stellar economic growth may be heading for a downturn, with serious consequences for the Liberal budget.

That slower-growth number has large-scale effect for every government promise as previous forecasts had already projected a government which would maintain deficits until 2045.

Bleak Future

The article on the CBC site further points out a bleak overall view where economic growth is stymied by low productivity, and aging society, and lacking investments.

“This very rapid pace of growth is not sustainable going forward as … transitory factors start to wane and interest rates will likely continue rising,” says the bleak Oct. 4 note, ordered by Morneau and drawing on internal economic analyses.

“The department’s internal assessment, made three months ago, is generally in line with current forecasts by private-sector economists, who note slow growth in Canada’s labour force because of an aging society, and the lack of business investment in equipment needed to boost labour productivity.”

With this largescale slow-down expected in the economy, one has to wonder how the Liberals plan to continue to fund a larger and larger welfare state. This could explain why the Liberals have brought forward so many sweeping tax changes even as many media stations actively take hardline stances against the move.

Real Action Required

Canada’s aging population requires a real response in the age of technology. The current stance involves further centralization, taxation, and a removal of corporate flexibility.

Now I would not reject those things if the government at least had a plan. It has none.

An article in the Huffington Post, for example, discusses a report by McKinsey and Co which stipulates that over 40% of the Canadian job market could be automated. In such a case the country which innovates will be the one which dominates. In reality, the Canadian government should aim to increase corporate flexibility and support innovation from every Canadian.

Published by
Ali Taghva

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