From left, Guy Legault, HE Michelle d'Auray, Canada's Ambassador to the OECD, Catherine Mann, Milos Barutciski, BIAC Canada co chair.
In a presentation to BIAC Canada subscribers in Ottawa and Toronto business, Catherine L. Mann, Chief Economist, OECD said that global growth is set to pick up modestly but remains too slow to meet expectations and entitlement commitments. The foundations of productivity and inequality are weak, she said. She commented that lack of competition between firms, largely the result of mergers and acquisitions, is stifling growth.
On the small business front, dynamism in Canada has declined in recent decades, as in other OECD countries, but overall it remains in the middle of the range, with some indicators above average and others below, she reported. Entry and exit rates as well as a labour-market measure of entrepreneurship have fallen in recent decades, the last measure in particular. Ms. Mann explained that this has resulted in less experimentation with innovation in products, processes and organisational arrangements, reducing multi-factor productivity growth.
Prescriptive measures would include policy that strengthens inclusive growth and manages risks. She noted that key priorities for reform should include preparing youth for labour market of the future while improving gender balance; promoting business dynamism and diffusion of technology and knowledge.Speaking specifically to Canadian policy, the Chief Economist noted that policy makers should focus on improving efficiency of business services by reducing regulatory barriers to entry in professional services; raising efficiency and equity of tax systems by broadening the tax base; reducing tax expenditures and facilitating firm entry by streamlining permits and licensing and cutting red tape.
She cautioned that governments avoid trade protectionism and deploy fiscal initiatives. Trade restrictions would hurt output and risk jobs. “If you are flying low, you want to avoid down drafts”, she quipped.
In response to Ms. Mann’s presentation, former Bank of Canada Governor, David Dodge noted that fiscal room should be used to enhance supply and capacity of the country and deal with the impediments including lack of competition. He said two of the biggest issues for Canada is physical infrastructure, including transportation infrastructure, and investments in human capital. Both have fallen behind and are seriously impeding our capacity as a country.
This event held on April 18, 2017 is part of an occasional series of roundtables organized by BIAC Canada for its subscribers. For further information about BIAC Canada, please visit Chamber.ca/advocacy/biac-canada/ or email email@example.com.