As Canada awakens from its COVID-19 lockdown, the race for economic growth is on. Both policy-makers and business leaders have their work cut out for them to make the most of a rare opportunity, emerging from a deep but short recession.
Businesses are adapting to the “new normal” of “hybrid work” and also realizing that a digital strategy is a must to cater to a growing population that’s become accustomed to getting more done online.
And the Canadian economy is back in an international competition to attract investment dollars and talent—it wants to be thought of as a business-friendly environment.
Meanwhile, government spending has ballooned, and the budget deficit—when expenses exceed revenues—is estimated to swell to $256 billion in 2020–21 from 23.8 billion in 2019–20, according to the Parliamentary Budget Officer.
Against that backdrop, business leaders from different industries assessed the roadmap ahead for Canada at the Collision from Home online technology conference on June 24 and 25.
Making Canada More Competitive
A rise in deficit spending leads to higher taxes in the future, but “I would encourage politicians not to tax that back right away,” RBC president and CEO Dave McKay said.
“There’s lots of countries that are thinking the same thing. There’s an opportunity to repatriate jobs, an opportunity to build up manufacturing bases and digital capabilities, so taxation policy and regulation are really critical components for businesses to come together with government to take advantage of the opportunities before us,” McKay said.
After the Trump administration aggressively cut taxes in late 2017, Canada’s business environment, with its higher tax rates, became relatively less competitive.
McKay also pointed to the need for appropriate government support in terms of easing regulation, raising foreign investment, and encouraging immigration to fill the needs of the economy.
Rogers president and CEO Joe Natale is focused on the competition for international talent—calling it a “war.” By 2021, Canada is expected to have 216,000 unfilled tech positions, according to the Information and Communications Technology Council.
The systemic regulatory hurdles that diminish Canada’s attractiveness include carbon taxes, pipeline delays, interprovincial trade barriers, and red tape that slows approval processes for permits, for example.
As Canada restructures its supply chains, continues to build infrastructure, and pumps out talent from its schools, McKay emphasized that policy-makers need to do more to attract foreign investment.
Canada has already lost billions in potential investment from the oil and gas sector alone due to greener pastures south of the border, though the drop in oil prices due to COVID-19 has exacerbated the underlying trend.
