Canada needs to pursue free-trade deals with China and other key Asian economies, attract more foreign capital and immigrants and pour billions of dollars into modernizing transportation and other vital infrastructure, says the head of a panel set up to advise the federal government on a long-term growth strategy.
Canada will need "a strong jolt" to change its current low-growth trajectory, Dominic Barton told a business audience in Toronto Wednesday.
But like other mid-sized countries with limited resources, Canada will have to get that jolt from a handful of sectors where it can build on competitive advantages and increase its shrinking number of global champions.
Mr. Barton, global managing director with McKinsey & Co., chairs a 14-person panel of business people and academics set up earlier this year by Finance Minister Bill Morneau.
Canada scores poorly among its peers when it comes to attracting foreign investment, partly because of regulatory impediments, including outright limits in such sectors as telecom, banking and agriculture. But Canada is also losing out to far more aggressive pursuers of foreign capital such as the Netherlands, Switzerland and Singapore, which do a a far better selling job, Mr. Barton said.
Singapore officials are "unbelievably aggressive" in luring capital, he said. "We aren't out there marketing what we want."
Tapping into one "megatrend" – the enormous growth of the middle class in Asia and the soaring demand for consumer goods and services – would help Canada reverse its declining share of global trade.
Short of free trade with the likes of China, which Mr. Barton, an old China hand, acknowledges makes Canadians nervous, Canada ought to be deepening existing trade and investment ties.
On the infrastructure front, Mr. Barton identified a gap of about $500-billion in funding for what Canada needs to make the economy more efficient. Major rail, port and other projects will need a considerable injection of private capital and the political will to tackle them, he said.
"You have to expend political capital on some of these issues," he said, without citing specific projects.
One problem in devising long-range plans is the "accelerating" pace of change and disruption across key industries and the effect on employment and skills training, Mr. Barton told the lunch meeting of the Toronto Region Board of Trade.
Panel members "are a bit nervous" about the rapid impact on the labour market stemming from automation and other technological advances.
"We've got to anticipate that whatever we do will be useful five to 10 years down the road," he said.