Advisory council recommends Canada embrace

 trade, become global hub to ‘jolt’ economy

The federal government has an “economic imperative” to reject anti-trade sentiments and instead position Canada as a “global trading hub,” an economic advisory council says.

The Advisory Council on Economic Growth on Tuesday recommended a series of steps the federal government must take to “jolt” the Canadian economy into a faster pace of growth. The council, a 14-member body handpicked by federal Finance Minister Bill Morneau, has previously said it wants to boost the average Canadian household income to $105,000 a year by 2030, up from a current forecast of $90,000.

Canada’s rich natural resources, geographic position, skilled labour force and stable political climate make it an idyllic trading partner, the council states. Canada should therefore work to improve the North American Free Trade Agreement, enact the Canada-E.U. Comprehensive Economic and Trade Agreement, and pursue bilateral trade deals in Asia, particularly with Japan, China and India, the council said.

“We’re a small trading nation. We have to take more control of our own destiny,” said Dominic Barton, chair of the council.  

The council’s pro-trade stance flies in the face of the protectionist vision held by Canada’s largest trading partner, the United States. Donald Trump, U.S. president, was elected on a promise to do away with trade agreements and policies that he says result in jobs leaving the U.S.

Canada is set to enter talks with the new Trump administration that could update NAFTA. Barton said Canada should “double down” on NAFTA and strive to come out of those talks with a deeper trading relationship with the United States. Canada could improve transportation infrastructure across the U.S. border. Canada could also harmonize regulations to better integrate supply chains.

“We still see lots of opportunity, despite all the protectionist talk,” Barton said.

Boosting trade is just one of several recommendations in the council’s second report since it was formed 10 months ago.

For example, the council calls for the government to join with the private sector to create a venture fund to fill a $400-million to $500-million capital shortfall for early stage start-ups.

We’re a small trading nation. We have to take more control of our own destiny

It also says Canada needs to boost labour force participation by encouraging people to work beyond traditional retirement age, by engaging more indigenous and lower income Canadians in the work force, and by setting up a national day care system that would enable more women with children under 16 to join the labour force.

While the report calls for more trade within NAFTA, it also recommends Canada seek stronger trading ties with other nations — among them China. “I think it’s the right of every country to be able to have a diversified trading relationship,” Barton said.

U.S. president Trump has accused China of siphoning off U.S. jobs. Barton rejected the view that globalization is the sole cause of manufacturing job losses.

“I would argue that technology has played more of a role than trade,” Barton said. “That could come our way, too, if we aren’t skilling our people quick enough, properly enough, to be able to have good jobs.”

The council proposes Canada set up a “FutureSkills Lab” that will help “upskill and reskill” workers so they can keep pace with technological change.

The lab would be a national, arm’s length body that would study how to identify skills gaps in the labour market, and develop innovative training programs that would help workers adapt.

“Advances in automation and digitization, combined with continued forces of globalization, are leading to fluid and mobile labour markets where employers’ skills requirements evolve quickly and workers transition between jobs and industries more often than they did in the past,” the council says.

Financial Post

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Tom McCarten · Western University