The former chief economic analyst of Statistics Canada poses a dire warning to Canadians in an essay on our slow economic growth, produced for the fiscally conservative Fraser Institute.
Philip Cross says with Canada’s economic growth increasing at the slowest rate since the Great Depression, the Trudeau government risks doing irreparable societal harm by focusing on redistributing income, rather than economic growth.
“History shows that previous periods of economic stagnation or decline have unleashed social and political forces far worse than protectionism,” Cross writes, citing a warning by Austrian economist Friedrich Hayek, who grew up during the Great Depression that “the one thing modern democracy will not bear without cracking is … a substantial lowering of the standards of living in peace time, or even a prolonged (stagnation) of its economic conditions.
“Canada is in a full-blown economic growth crisis which is homegrown and due largely to poor government policy … rooted in declining business investment and stagnating growth in exports, two critical sectors of the economy.”
Cross cites a 2021 report by the Organization for Economic Co-operation and Development predicting “Canada’s per capita GDP growth between 2020 and 2060 will be the lowest among its 29 member nations.”
He says annual per-person GDP — a measurement of prosperity — grew by only 0.8% from 2013 to 2022 after adjusting for inflation, the worst showing since the 1930s when it was negative 0.3%.
Cross notes the government can’t blame the pandemic because Canada’s slow economic growth rate began before it started in early 2020.
From 2016 to 2022, economic growth in the U.S., adjusted for inflation, grew by 11.7% compared to just 2.8% in Canada.
The value of business investment in Canada at the end of 2022, adjusted for inflation, was 17.6% lower than in 2014, while the value of exports basically flatlined.
Rather than encouraging capitalism and competition, Cross says, the Trudeau government has pursued policies leading to “persistent budget deficits and chronic slow growth … low rates of business formation, regulatory uncertainty, barriers to investment (especially in the resources sector), restrictions on internal trade … and low levels of productivity and innovation.”
On the optimistic side, he says it’s not too late to turn things around, but only with a fundamental change in government policies.
OTTAWA – Statistics Canada says the country’s merchandise trade deficit narrowed to $1.3 billion in September as imports fell more than exports.
The result compared with a revised deficit of $1.5 billion for August. The initial estimate for August released last month had shown a deficit of $1.1 billion.
Statistics Canada says the results for September came as total exports edged down 0.1 per cent to $63.9 billion.
Exports of metal and non-metallic mineral products fell 5.4 per cent as exports of unwrought gold, silver, and platinum group metals, and their alloys, decreased 15.4 per cent. Exports of energy products dropped 2.6 per cent as lower prices weighed on crude oil exports.
Meanwhile, imports for September fell 0.4 per cent to $65.1 billion as imports of metal and non-metallic mineral products dropped 12.7 per cent.
In volume terms, total exports rose 1.4 per cent in September while total imports were essentially unchanged in September.
This report by The Canadian Press was first published Nov. 5, 2024.
