Canada’s territories have much to contribute to the nation’s wealth, and the federal government should implement policies to help territories become more financially independent and allow them to perform to their potential, says a report by the Canadian Chamber of Commerce.
Canada’s territories “punch above their weight economically,” the report says.
The three territories—Yukon, Northwest Territories, and Nunavut—cover around 40 percent of Canada’s land mass with just over three percent of the population.
The territories’ competitiveness is negatively affected by the cost of doing business in the region.
In 2011, Yukon and Nunavut had the highest GDP increases in the country. However, the territories’ competitiveness is negatively affected by the cost of doing business in the region.
“We are selling our territories—and Canada—short,” says Perrin Beatty, president and CEO of the Canadian Chamber of Commerce.
“The Federal government must take the lead in developing an integrated, long-term strategy and business case that create the conditions for full economic participation by the territories and all of their peoples,” Beatty said.
“Business people want the territories to become more financially independent of the federal government and they see the private sector as the means of achieving it.”
The chamber held discussions with a number of stakeholders including business people in the territories, who noted that the cost of doing business in the territories is five times higher and the effort of operating is 10 times more compared to the provinces.
Challenges faced by the territories include a shortage of skilled labour; lack of infrastructure; poor access to capital; regulation; and Ottawa’s relationship with the territories and Aboriginal Peoples.
Overcoming Barriers to Prosperity
The report offers short, medium, and long-term recommendations for overcoming the barriers to the territories’ prosperity.
Some of the actions the government could take in the next 12 months include supporting pan-territorial initiatives in skills and training, establishing incentives (such as tax credits) to larger companies to mentor and collaborate with small businesses, and ensuring there is capacity to deliver regulatory approvals from territorial governments, among others.
Over the next one to two years, Ottawa could increase the Northern Residents’ Tax Deduction in accordance with the increase in the Consumer Price Index since 2008 and index it annually to any increases in the territories’ costs of living, the report says, while offering a number of other recommendations to be implemented within this time range.
Looking at the longer term, the chamber recommends the government look into pursuing more opportunities to form partnerships with the private sector in infrastructure projects in the territories, as well as considering the potential community and commercial benefits when choosing the locations of federal infrastructure.
The government should also hold consultations with all of the stakeholders, including local governments, businesses, and Aboriginal Peoples, and form a vision for social and economic development across the territories, the report notes.
The vision should contain a strategy, business case, and implementation plan, and must also have the flexibility to accommodate the different circumstances of each territory.
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