Dany Assaf is co-chair of the competition and foreign investment group at Torys LLP. Walid Hejazi is a professor of international business at the Rotman School of Management. Joe Manget is the chair and chief executive of EHN Canada.
They are the authors of the new book Everybody’s Business: How to ensure Canadian Prosperity Through the Twenty-First Century, published by Sutherland House.
In 2012, only 37 per cent of Canadians surveyed by Nanos thought that their children would have lower living standards than themselves. By 2022 a similar poll by Pew Research pegged the number at 75 per cent. An increasing number of Canadians seem resigned to believing that the next generation will be worse off than us.
Like many parents and proud Canadians, we don’t want to accept that. It is not too late for us to change the narrative, and more importantly ensure that our living standards do not decline. It will take time and new focus, but it can be done.
In 1967, on Canada’s 100th birthday, we were the ninth largest economy in the world with almost all Canadians enjoying a very high standard of living. But by our 150th birthday in 2017, we dropped to 16th, and by our 200th birthday we are expected to drop to 25th as we are overtaken by countries such as Malaysia, Thailand and South Korea. Coincidentally (or not) citizens of these three countries had significantly better outlooks than Canada in the 2022 Pew Research poll.
Young adults are giving up on home ownership, and a lot of them are furious about it
This rapid decline in our prosperity is not something that has happened “to” us, it is a result of a series of policy actions by successive governments over the past 50 years. We have chosen to consistently reduce our investment in research and development (as a percentage of GDP). Spending on our immigration, education and entrepreneurial supports have not kept up with the increase in our population and we have not fully leveraged the potential of new technologies.
Instead of investing in the future, our governments have spent on initiatives which do not increase our longer-term prosperity and provide our next generation with the platform to be better off than us. One example of this is the government’s greatly increased spending. The recent budget projects $151-billion more in spending than the year before it came to power. Since this government came to power, federal employment has increased by over 30 per cent.
But rather than accepting a continuing slide in our standard of living, we can be world leaders in GDP growth per capita, be the No. 1 choice for the world’s most talented individuals to live and invest in, have the No. 1 ranking for infrastructure and stability, and be rated as the easiest country to do business in.
To get there we need to focus investment in the four fundamental pillars of economic development that have existed since the beginning of time:
- Best People. We need to become the country of choice for the most talented individuals from around the world and develop the world’s most talented people. We need to encourage R&D, enhance our teaching of critical thinking and digital literacy in our schools, and simplify the assessment and recognition of professional credentials for new immigrants.
- Best Tools. We can move ideas and goods across the country and around the world with a much more comprehensive and lower-cost digital infrastructure, coupled with an improved physical infrastructure.
- Access to Materials and Resources. We can, in an environmentally sustainable way, increase access to the materials and resources we need to compete in the modern economy. This would include the abundance of natural resources and critical minerals we have, such as lithium for batteries.
- Access to Markets and Capital. Instead of depending on foreign investors – such as the now-defunct Silicon Valley Bank – to fund our new ventures, we can do so with the right framework and incentives from one of the most stable and admired banking systems in the world. But we should continue to be open to free trade and foreign direct investment.
These four pillars must be supported by policies that reduce government bureaucracy, making it easier to create and commercialize businesses.
We should not be complacent. We don’t have to accept the rapid decline in prosperity that the pundits predict.
Editor’s note: A previous version of this column incorrectly stated that the federal government made a recent decision to spend an additional $151-billion per year by increasing government employment over 30 per cent. In fact, the government is projected to spend $151-billion more next year than it did under the final year of the previous Conservative administration; as well, government employment had increased by over 30 per cent over the eight years the Liberals have been in power.