COUNCIL DELIVERS ECONOMIC BLUEPRINT

OTTAWA • As Canada’s economy cratered in 2009, there was near-unanimous agreement about the response.

Pundits, policy wonks, politicians and, most crucially, voters agreed that massive stimulus spending and a concerted push in international fora to keep borders open for trade was the best way to deal with that crisis.

And while it took the existential threat of a Stéphane Dion-led coalition to get Stephen Harper’s Conservatives to see the wisdom of that broad consensus, in the years after, they turned their response to the worst economic crisis in 70 years into a political virtue.

Canada’s economy is not in nearly as bad a shape now as it was in 2009. Yet, there may be more potential political peril and less chance for virtue for the year-old Liberal government of Justin Trudeau precisely because there is widespread disagreement about what, if anything, is ailing Canada’s economy and what, if anything, ought to be done about it.

“I think if you asked 10 economists what the biggest drag on growth is and what the biggest thing is holding us back, you might get eight or nine different answers,” said Doug Porter, the chief economist at BMO Capital Markets.

Enter, then, Finance Minister Bill Morneau’s hand-picked 14-member panel known as the Advisory Council on Economic Growth, which published its first report for Morneau on Thursday.

This blue-chip group, led by Dominic Barton of the global consultancy McKinsey and Co., but which also includes leading lights from business and academia, is part of a concerted political effort by the Liberals to reduce disagreement and build consensus around some policy goals.

Finance ministers typically get budget advice from any number of well-qualified sources — their staff, the civil service, any number of think-tanks — but Barton and his group give the Liberals an additional veneer of respectability and probity.

“I think they’re trying to get a menu of options and some political cover,” Mike Moffatt, an assistant professor in the business economics and public policy group at Western University’s Ivey School of Business.

“I don’t think we would have had nearly as good an understanding of the challenges nor as thoughtful a way of putting these (ideas) forward without the advice of this council,” Morneau said when challenged that Barton’s group is mostly all about political window dressing.

The menu so far from Barton’s group consists of three servings.

First, it argues that a smart infrastructure program, partly delivered via a new Canadian Infrastructure Development Bank, can help achieve short-term stimulus goals but, more importantly, boost long-term productivity.

Second, new or reworked rules and policies around attracting foreign investment could, within a few years, add more than $40 billion in new economic growth.

Third, immigration levels should be boosted to 450,000 persons a year, up from the current level of about 200,000, to help Canadian firms find the talent they need to prosper.

None of these ideas is necessarily new.

Navdeep Bains, the minister of innovation, science and economic development,

IS THIS JUST THE NEW NORMAL?

made the case last week at a policy conference in Ottawa that immigration must be a key component to an economic growth agenda.

“More immigration creates more jobs,” Bains said.

He has spent the last several weeks touring the country holding roundtable discussions as he looks for good ideas to spur new investment, innovation and, ultimately, economic growth.

Bains came away from that exercise confident the three most important things his government could do toward those objectives was to improve the country’s talent pool; encourage and harness emerging technologies more rapidly; and figure out how to turn successful startup companies into global behemoths.

Meanwhile, MPs on the House of Commons finance committee are on tour across the country — they were in Quebec City Thursday and will be in Toronto Friday — soliciting advice for the 2017 budget. And on top of that, Morneau and his parliamentary secretary are holding their own town hall meetings across the country.

All of this is partly to live up to a commitment to an inclusive robust policy development process. But after promising voters last fall that Liberals, and only Liberals, could boost the fortunes of the middle class, these consultations are also exercises in acquiring political capital.

“I think they’ve set themselves up,” said Stephen Gordon, an economics professor at Laval University. “When (Liberals) are talking about promoting economic growth, as an economist, I say, yeah, that’s clearly where you want to go. But also, as an economist, I say that’s a really hard problem. We haven’t solved it.”

Unlike that 2009 crisis when the problem and the policy response were crystal clear, the ambiguity of the current environment introduces a level of political uncertainty — hence all the consultations.

“There is an ongoing debate,” said Moffatt. “Is there anything wrong with the economy at all? Or is this just the new normal?”