As the whole country turns its attention to the festivities this coming week marking the 150th anniversary of Confederation, we can all be encouraged to see that Canada’s national economy is showing some real signs of improvement after a decade in the doldrums.
The economic policy of the Government of Canada is based on the firm belief that Canada’s biggest, immediate economic problem has been an overall growth rate that is simply too slow.
Through most of the 1990s and well into the first decade of this new century, Canada was able to count on annual economic growth averaging 3%, year-after-year. But that stalled in 2008. And ever since, we’ve been limping along with meagre growth, averaging only about 1.5% per year.
That’s just not good enough to generate the jobs, the incomes and the economic confidence necessary to meet the needs of Canada’s middle-class and all those working so hard just to get to the middle class.
So our policy is not austerity. Instead, it’s a set of proactive measures designed to drive greater growth, namely:
- middle-class tax cuts and a more generous monthly family benefit to increase disposable incomes; plus
- investments in higher education, skills, science, innovation, infrastructure and trade.
These federal priorities fit neatly with Saskatchewan needs and demographics. Our Middle Class Tax Cut, for example, helps a majority of those in Saskatchewan who pay income tax. Our targeted, non-taxable Canada Child Benefit, provides significantly more cash every month to 9-out-of-10 families. Our increased support for students, seniors and Indigenous people is aimed at important segments of Saskatchewan’s population.
The federal plan for growth invites two key questions:
First, is it affordable?
The answer is “yes” because Canada’s federal debt ratio—that is, the size of our debt compared to the size of our economy—is currently the best in the G-7 and among the best in the western world. Since the early 1990s, we’ve more than cut it in half. And that’s a key indicator of economic sustainability.
What’s more, going forward, Canada’s debt ratio is expected to remain in very good shape (essentially flat), before declining even further.
Our federal investment plan is affordable also because interest rates have never been lower and because the growth generated by our investments is an absolute prerequisite to balancing the country’s books in the years ahead.
Second, is the plan working?
The latest numbers show gathering momentum. More than 350,000 new jobs have been generated over the past 18 months, mostly full-time jobs. More people are re-entering the job market looking for work. And Canada’s economic growth rate is back above 3% on an annualized basis once again.
This is all good news, but we cannot be complacent. A lot more progress still needs to be made – especially to bolster middle class families and to assist those who are striving to get there.
But so far, so good. Another reason to be hopeful about Canada and its future.