Morneau urged to create bank

OTTAWA• Ahead of a crucial fiscal update next month, the federal government is being urged to create a longanticipated infrastructure bank to funnel in more than $200 million over the next decade, tapping into institutional investors and helping to boost Canada’s lagging economy.

Finance Minister Bill Morneau said Thursday that his 14-member Advisory Council on Economic Growth — an independent body formed earlier this year — has recommended a series of initiatives expected to underpin long-term growth.

At the same time, Ottawa will consider creating a foreign-direct investment agency to focus on new investment streams to help lift output, while also attracting more immigrants to the country to fill a growing labour gap being left by Canada’s aging population.

“There’s nothing surprising in this report,” the finance minister told reporters in Ottawa.

“What I do think the council has done … is they have chosen to be bold in their recommendations to help us think about how we can have our biggest impact by creating an approach that will allow institutional investors from around the world to seek out Canada as the place that they to invest for long-term return for their investors and for the benefit of Canadian families here,” Morneau said.

These investments will be “helping people get to work, helping us have more affordable housing,” he added. “Those institutional investors are going to be very helpful.”

The role of the proposed Canadian Infrastructure Development Bank will be to attract financing from institutional investors to fund projects over the next 10 years.

Meanwhile, the advisory council has urged to the government to increase annual immigration levels to 450,000 from 300,000 over five years.

“Canadian firms struggle to find the senior and specialized talent they say the need to scale their operations quickly and competitively,” the finance department said. “This talent gap is particularly acute for firms contributing to and investing in technology-based innovation and digital automation.”

“All the recommendations are really (about) thinking how we can grow the economy in a challenging time and create good jobs for Canadians and for Canadians in the future,” Morneau said of the councils’ report, titled Unleashing Productivity Through Infrastructure.

Recommendations by the council, chaired by Dominic Barton, managing director of global management group McKinsey & Co., will be a key element of Morneau’s fall fiscal update on Nov. 1, a document that will contain policy initiatives ahead of Budget 2017, expected some time in March.

The update “will help Canadians see the challenges that we face globally, and it will also give Canadians an understanding of the kind of measures we put in Budget 2016 (and) how they are impacting our economy today,” Morneau said.

The update will “show how we will amplify those budget measures to have a greater economic impact for middle-class Canadians show over the long term — and that’s really what we’re focused on.”

In its 2016 fiscal spending document — presented by Morneau on March 22 and the first by the new Liberal government — committed to a deficit of $29.4 billion to fund the government’s stimulus program, and another $29-billion deficit in fiscal 2017, with the shortfall narrowing over a five-year period.

In documents released Thursday, the Finance Department said Canada “faces significant economic headwinds in the medium- to long-term, including a significant decline in per capita GDP growth. To reverse the negative implications of an aging population, Canada will need to invest in productivity.”