Canadians have seen almost no improvement in their living standards in the last 15 years and prospects for don't look good for gains any time soon.
SANDRA CORDON
Globe & Mail
Ottawa — Canadian manufacturers are urging Ottawa to put much more attention — if not dollars — into boosting living standards as Finance Minister Ralph Goodale puts the finishing touches on what’s likely to be a spendthrift budget.
Cabinet ministers and labour leaders will join the Canadian Manufacturers and Exporters organization in a two-day session beginning Monday at the foot of Parliament Hill. The meetings are aimed at finding ways to improve business, jobs and living standards.
Unless changes are made, and quickly, to boost productivity, Canada won’t have the money to fund the child care, old-age security and education improvements that Mr. Goodale wants to fund in his budget, says Jay Myers, chief economist with the CME.
“We can’t expect to improve health care, we can’t expect to educate young people, improve the environment, improve child care, if we’re not creating the economic growth that is going to pay for all of that,” Mr. Myers said.
“We need a strategy … to look at what it takes to continue to increase our economic prosperity as a part of any social priorities the government might have.”
Mr. Goodale is to deliver his second federal budget on Feb. 23 with a surplus likely to reach almost $9-billion this fiscal year, and many spending promises are expected.
The CME hopes the budget will also cut business taxes and increase spending on border crossings, ports and other infrastructure to ease trade and commerce.
But it’s also concerned with longer-term improvements to education, skills training and innovation — issues of interest to the broader business community.
That helps explain why the CME conference has attracted such cabinet members as Industry Minister David Emerson, Trade Minister Jim Peterson and Joe Volpe, the new Immigration Minister.
Manufacturing plays a large role in the economy, contributing about 18 per cent of the country’s entire economic activity and employing 2.3 million people.
Mr. Myers hopes to promote the notion that modern manufacturing rarely involves dirty, dangerous shop floors any more but instead requires well-trained, sophisticated workers.
“It’s a very highly skilled industry today where two-thirds of the work force now coming into manufacturing needs some post-secondary education.”
To develop a blueprint for improving productivity, or living standards, the CME has been holding town hall-style meetings around the country over the last year.
It concludes that much of the work toward improving productivity must be done by businesses themselves, who are no longer sheltered somewhat by the very cheap dollar.
When the loonie was as low as 62 or 63 cents US — as recently as two years ago — it actually made financial sense for many businesses to delay investments in new equipment.
But with a dollar trading above 80 cents and trending higher, coupled with increased global competition, the days of coasting on a low loonie are long gone, concludes the CME in a major report to be released at its conference.
“In recent years, other countries have been gaining on Canada in terms of their ability to generate economic wealth,” says the study.
Canada has dropped from the fifth to ninth most prosperous country in the OECD over the last 15 years, while per capita income levels are now 22 per cent higher south of the border compared with Canada, it says.
To close the gap “we must continue to grow the high-value, high-paying activities that are part of the modern business of manufacturing in this country.”
Other business groups and leading economists such as Don Drummond of TD Bank Group have also urged Ottawa to develop a long-term strategy for modernized trade, economic growth and productivity.
In a recent report, Mr. Drummond said Canadians have seen almost no improvement in their living standards in the last 15 years and prospects for don’t look good for gains any time soon.
He urged widespread tax cuts and increased spending on education and skills training.
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