Finance Minister Jim Flaherty said in an interview that Canada’s unemployment rate is too high and his government will try and do better at getting Canadians working again as part of commitments made by Group of 20 countries at a summit over the weekend.
In Sydney, the world’s most powerful finance ministers and central bankers agreed to boost global growth by an average of at least 2 per cent over the next five years above current trajectories – a soft target that could add an additional $2-trillion (U.S.) in aggregate global output to the world economy.
Mr. Flaherty said Canada was already well on track to do better than the 2-per-cent average agreed on by the G20, but added his government needs to better at boosting the number of people finding the right jobs.
“It’s important that we match people to jobs in Canada, which is a way of growing the economy,” Mr. Flaherty said in an interview in Melbourne. “We have an unemployment rate that is too high. It’s only modestly too high, but it’s too high. And we have a lot of jobs available in the country that are not being filled by people who are available to work. So we need to do a better job at that.”
Canada’s unemployment rate is currently at 7 per cent, compared to 6.6 per cent in the United States. Mr. Flaherty said that measures in his recent budget – such as an apprentice loan program that will help people train for jobs in construction – are examples of Canada’s efforts in this regard.
Mr. Flaherty’s comments come after the G20 summit of finance ministers and central bankers in Sydney that is a prelude to a bigger meeting later this year in Brisbane. Representatives of the world’s largest economies – from the U.S. and European countries to China and Japan – gathered to talk about global growth and tax reform with leaders from global economic institutions such as the International Monetary Fund and the Organization for Economic Cooperation and Development, which represents the world’s richest countries.
The 2 per cent figure, which is both a soft target and an average over the whole G20, is simply meant to frame countries domestic policies – and provide a sharper focus on economic growth. When asked about concrete strategies to boost growth, Mr. Flaherty would only refer to an existing labour market policy and said he would continue to be fiscally prudent.
On other issues, Mr. Flaherty said of his political future that he wanted to remain around until after the next election in order to balance the budget, but he continued to avoid any firm commitment either way. Mr. Flaherty, who spoke quietly at the meeting, has spoken publicly about dealing with a skin condition that requires strong medication. “Well we’re working toward a balanced budget,” Mr. Flaherty said. “We’re very close. I’d like to see the budget balanced.”
Mr. Flaherty declined to comment on famed economist Nouriel Roubini’s recent comments that Canada should more aggressively talk down the Canadian dollar – which has sunk from parity with the U.S. to roughly 90 cents. Mr. Roubini became known as Dr. Doom for being bearish but became famous for accurately predicting the global financial crisis. Earlier at the G20 summit on the weekend, Mr. Flaherty said that he felt the pain of emerging markets dealing with currency fluctuations because of what’s happened to the Canadian dollar.
Despite Australian Treasurer Joe Hockey’s comments during a fireside chat in Melbourne at the Australia-Canada Economic Leadership Forum that multilateral free-trade talks such as the Trans-Pacific Partnership remained “calcified,” Mr. Flaherty remained hopeful – and said Canada was being “aggressive” on free trade. Australia, which has put a focus on free trade agreements in Asia, secured one recently with South Korea and is “on the threshold” of a deal with Japan, according to Mr. Hockey, while Canada remains mired in ongoing talks and accused by organizations such as the Asia-Pacific Foundation of Canada as not pursuing these deals forcefully enough.
“There were some conversations,” Mr. Flaherty said. “Generally speaking, I think people have conclude that progress is being made on the TPP.”
During the conversation with Mr. Hockey, Mr. Flaherty mentioned that he watched the Canadian men’s hockey team win Olympic gold at a pub in Sydney with Bank of Canada governor Stephen Poloz and Mark Carney, who left the top job at the Bank of Canada to head the Bank of England. Mr. Hockey said Mr. Carney was one of Canada’s “greatest exports,” but Mr. Flaherty replied jokingly: “We didn’t get much on that trade.”
At the opening of the chat, which was held in front of several prominent Canadian CEOs, including those from TMX Group and OMERS, Mr. Hockey made some amusing references to his name.
“I’m very popular in Canada with a name like Hockey,” he said to laughter. “I’ve heard they’ve got a hall of fame to me.”