Sweeping reforms at the federal level would ensure the cooperation of city and provincial governments across Canada in ensuring the creation of an economic environment that would lead to sustained growth in an increasingly troubled world, according to a veteran analyst.
In a special for The Globe and Mail
, William A. Macdonald called for a unified front between Ottawa, provincial officials, and First Nations leaders “in facing a global economic and political situation that is likely to remain unsettled for decades.”
While resources will continue to figure in Canadian trade for the foreseeable future, the country’s workforce would actually be the next major economic tent-pole, and thus the appropriate reforms should be applied, Macdonald stated.
“[Every] province needs growth for revenues and jobs – requiring a stronger federal policy focus on human resources (as well as the First Nations). Each can attract good people, and has done so. But they should push the federal government, as should the Conservatives and the NDP in Ottawa,” he wrote.
Aside from promoting more open immigration, greater industrial competition, and a robust university-based R&D sector that would lead to what he called a “federal growth strategy”, the Liberal government should also implement a “tax regime that takes a capital-pool approach to capital gains and thus reflects the reality that building businesses and capital are lifetime, not single-transaction, affairs.”
“This approach works everywhere, in every activity, and provides a doorway to businesses of the future. It also allows the economy to perform much better when it comes to creating capital – essential in a country that borrows more than $60-billion a year. It would rebrand Canada as the best of both worlds – societally inclusive and economically hard-headed,” Macdonald argued.
“The federal government may achieve these goals all by itself, but the provinces have the clout to make sure it does,” he added.
“Monetary policy was part of the reason the world avoided a global depression, but is no longer the right medicine. That particular cure has been maintained for too long at too high a dose and to less and less effect. It must give way to something better, despite the unavoidable risk of withdrawal shock,” the analyst said.
“We may not have much time to get on the right path. And what we do must rely more on our own strength, rather than the rest of the world’s, although that process could take decades,” Macdonald concluded.