Canada’s sobering fiscal reality demands a growth strategy
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It’s been a roller coaster kind of a week.
I am heartened by reports that several COVID-19 vaccine candidates are showing promise and are being assessed for approval in Canada. At the same time, new cases are on the rise in this country and I am saddened by the toll the virus has taken on so many.
In addition to the impact on health and well-being, the pandemic has also ravaged the economy and this week we learned more about the extent of the economic damage. Today’s Labour Force Survey results for November show some promise in getting back to pre-pandemic employment levels, but jobs continue to remain precarious in the hard-hit travel, tourism, hospitality, and retail sectors. Tuesday’s GDP report revealed that while the economy grew at a record rate in Q3, it remained flat in October as a new round of lockdowns came into effect in parts of the country.
On Monday, the federal government presented a sobering fiscal outlook. Canada’s debt has ballooned through the pandemic, now closing in on $1.4 Trillion. Increased government spending was essential to help Canadians weather the health emergency, but let’s be clear that this money will need to be paid back. If our economy does not grow out of this recession, we will be leaving massive debt to our children and grandchildren.
As I noted in my statement, the federal government’s fiscal and economic update had some positive elements. However, it missed the mark when it came to relief for distressed sectors by not including Canada’s leading airlines.
Most disconcerting of all was the lack of a substantive plan to spur private sector investment and grow the economy. But we still have time to chart a better course.
Using the Business Council’s report “Powering a Strong Recovery” as a framework for a growth plan, we are reaching out to policy experts, partners, and others to seek their advice and rally support for practical recommendations in the lead-up to the next federal budget.
If you want to share your ideas, please feel free to reply to this email.
President and CEO
Business Council of Canada
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