Economic weakness threatens our prosperity

When the Coalition for a Better Future — which we co-chair — released its first scorecard report for Canada’s economy a year ago, it expressed concern about persistent economic weakness that was threatening to undermine our future prosperity.

In our second report, released Tuesday, the numbers show we’ve made little progress.

The report shows that on the critical measures of living standards — output per capita and labour productivity — we’re moving in the wrong direction. There are signs distributional outcomes may be worsening too.

This is happening amid higher interest rates and inflation. It’s particularly affecting young people, immigrants and racialized Canadians.

Our path to a green energy transition is unclear.

The coming federal budget is an opportunity to make up some of the lost ground.

Canadian investors are still looking for more clarity around the investment tax credit framework for clean energy investments.

The federal government also needs to show how it plans to underwrite key carbon capture projects going forward, which companies see is a necessary condition for the transition to move forward. And Finance Minister Chrystia Freeland needs to do this without undermining the nation’s fiscal credibility.

Looking a little bit further ahead, we see the approaching federal election as a critical juncture.

Canadians deserve a meaningful debate about from where economic growth will come. It’s incumbent on all parties to provide concrete ideas on how to improve living standards — today and in the future. We ask all those seeking elected office to avoid empty slogans.

The risk, of course, is the debate sinks into a muddy pile of short-termism and name calling. We need to hold all the political parties to account.

Economic growth is not an abstract concept only discussed in boardrooms and political circles. It’s the driving force that ensures we can put food on our tables, go to work, take care of our children and seniors and those most vulnerable, and ensure the air we breathe is clean.

There is plenty to celebrate. Incomes and wages have recovered from the pandemic and Canada’s economy has been doing better than just about anyone expected in the face of higher borrowing costs. This is a sign of resilience. The nation’s labour market remains historically tight despite slowing growth. This is helping to support household incomes.

Let’s also not forget that we are fortunate to have relative stability in a world of turmoil. Many of our peer nations have it much worse. But that’s all the more reason not to take anything for granted.

Productivity data can seem obscure, but it’s a vitally important metric for gauging a nation’s potential economic prosperity. Canada’s housing crisis poses additional constraints on economic growth. For example, it limits our ability to take advantage of immigration to drive our economy forward.

We are all so busy in our daily lives that we rarely stop to think about how important economic growth is to each of us and our families. And for each of us it means something different. That’s why we need to come together to share ideas around a plan for long-term growth.

This is especially important at a time of compounding global crises and while our economy is in transition.

Globalization is being challenged. Politics are increasingly driving economics, rather than the other way around. Macroeconomic uncertainty is becoming the norm. The economic landscape is changing.

We know there are no easy answers. But our message is that Canadians have choices. The decisions that policymakers, businesses and individuals make now will determine our country’s path for years to come.

And we need to choose to make economic growth the top policy priority.