In addition to directly managing relations with the United States, the top priority of Carney’s team must be to create conditions for stronger economic growth at home. Under Justin Trudeau, the Liberal government is fully focused on social policy, income redistribution, climate change and indigenous reconciliation.
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Prime Minister Mark Carney and his cabinet will face many pressing problems after a narrow victory in the federal election. Undoubtedly, Donald Trump, who handled the unstable multi-tax war initiated by the U.S. president – undoubtedly Job 1. Meanwhile, the restored Liberal government will face an enfee Canadian economy, which could be triggered by a recession triggered by Trump’s crazy trade policy, which could cause recession status and is economic growth in multiple areas. Find ways to implement (and pay for) the costly commitments on the Liberal election platform and will also tax Carney and his ministers’ capabilities.
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In addition to directly managing relations with the United States, the top priority of Carney’s team must be to create conditions for stronger economic growth at home. Under Justin Trudeau, the Liberal government is fully focused on social policy, income redistribution, climate change and indigenous reconciliation. Trudeau showed zero interest in strengthening the foundations of Canada’s prosperity, which was struggling with his watch, as former Finance Minister Bill Morneau wrote. Hopefully Carney’s government won’t make the same mistake.
Unfortunately, the Carneys started with weak economics. Canada has lost global market share in almost all of our export-oriented industries. Productivity has stalled and is not even enough to offset the ongoing depreciation of “capital inventories” – buildings, equipment and machinery owned and used by Canadian companies. The net value of FDI flows is huge, and Canadian companies invest more abroad than foreign companies invest in Canada, which is a clear sign of our decline in competitiveness.
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Even more worrying is that Canada’s true overall gross domestic product (GDP) (total income generated by households and businesses, divided by the total income of the population) shrinks by 1% between 2018 and 2023 before immersing again. During this time, we have been at the lowest point among the basic indicators of economic success and living standards in 38 developed countries.
In fact, Canada’s economy today is hardly as good as it was a decade ago (after adjusting for population growth and inflation). Comparison with the United States makes reading particularly painful. From the first quarter of 2016 to the fourth quarter of last year, inflation-adjusted economic output per person grew by only 2.5%, while in the United States, this is both a sign of economic failure in the Trudeau era and an indication of Ottawa’s need to change courses.
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So, what should I do?
Reversing Canada’s unremarkable economy will require a sharp turn with the Trudeau era policy. Federal policymakers should not seek to initiate business investments, improve Canada’s global competitive position, accelerate business innovation, and reduce business growth that has been killing the growth of our major industries in our economy, including the development of our economy, manufacturing and fundamental strategies. Progress in these areas will require a squeaky growth-suppressing tax system in Canada, a commitment to smarter, more effective regulation across government departments, and a more disciplined and thoughtful management of Ottawa’s $550 billion annual spending.
Will the Carney government complete this task?
Its first budget may be proposed in the next few weeks and should provide some initial clues.
Jock Finlayson is a senior fellow at the Fraser Institute.
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