Paul Martin, the former prime minister and finance minister, says he's worried that a "degree of self-satisfaction" will keep Canada from taking steps to boost its competitiveness.
Mr. Martin told a Washington conference on Canada's relative success during the financial crisis that the country risks a "version of Dutch disease," when strong currencies, driven higher by demand for a country's commodities, choke a country's manufacturing base.
The response isn't to weaken the currency, or do nothing, according Mr. Martin. The response is to take advantage of low interest rates to spend on infrastructure and other initiatives that would boost productivity, he said Wednesday.
"We should be investing very heavily in the things that will make us competitive," despite the deficit, Mr. Martin said. "It worries me we won't do that."
After a morning of discussions that focused on Canada's success at balancing the budget and regulating banks, Mr. Martin was asked during the lunch-time session whether anything worried him about Canada's prospects.
Mr. Martin said it would be a mistake for Canadians, watching the crisis in Europe, to believe "we are blessed by God" when it comes to economic management. If complacency becomes entrenched, Canada's factories and research institutions "will pay the price," Mr. Martin said.
