Wednesday's Speech from the Throne in Ottawa is more than just a bit of pomp from our British colonial past; it outlines the Canadian government's policy priorities for the new session of Parliament. It is, in practice, a political wish list from the party in power – in this case, the Harper government – of all its hopes and dreams for the country that, in a perfect world, it hopes to see fulfilled in its current mandate and beyond. They won't all come to pass, but the Throne Speech is a time to dream big.
Many of these goals are, by their nature, economic ones. So we asked several of Economy Lab's contributing economists for their own "wish list" of what they most want to hear in the Throne Speech regarding economic policy.
CHRISTOPER RAGAN – professor of economics, McGill University
"The government should recognize that the burden of Canada's slow-growth recovery is shouldered mostly by the unemployed and under-employed Canadians. The incidence of long-term unemployment is quite high in Canada, youth unemployment is very high, and many part-time workers continue to search unsuccessfully for full-time jobs. Extended absences from the labour market have long-term consequences both for the individuals involved and for the efficient functioning of the Canadian economy. Mindful of this burden, the government should commit to implementing policies in the near term that improve the functioning of Canada's labour markets, including improving labour mobility, enhancing skills training, and reforming the existing Employment Insurance program to generate more labour market flexibility."
ANDREW JACKSON – Packer Professor of Social Justice, York University
"The Throne Speech is an opportunity to reset the Harper government's economic plan, which boils down to balancing the budget and facilitating growth led by energy exports. What Canada needs is a long-term strategy to build a much more innovative and productive economy. This will involve greatly increased public investment in research and development and in technology diffusion, above all in clean energy and in energy conservation, as well as investment in public transit and other major infrastructure projects, and in higher education and skills training. Such investments can be financed at low cost and will bring major returns in both economic and environmental terms. What stands in the way are narrow public sector accounting rules and a narrow vision of our true economic potential."
STEPHEN TAPP – research director, Institute for Research on Public Policy
"International trade is a policy area where clearer signals might emerge. While we're told that Canada is close to a trade deal with the European Union, the government is also trying to improve access to less-traditional markets via the Trans-Pacific Partnership and talks with India, Japan and others – not to mention the open question of how Canada might approach China. Given the scope of these issues and their interconnected nature, a clear articulation of the government's priorities among these various talks, including updated timelines and goals for negotiations, could be a key part of additional refinements to Canada's Global Commerce Strategy."
SHERYL KING – independent macroeconomic strategist, Toronto
"If the Tories truly want to focus on gearing up Canadian economic growth, they should turn their attention away from government stimulus policies, be they of the fiscal or monetary ilk, and concentrate on efforts to boost productivity. While productivity growth has been a feature of the Tory platform for some time now, refocusing policies toward those designed to force businesses to become more competitive would produce better results than simply trying to goad firms to invest their growing cash stockpiles in productivity-enhancing new technology. Many sectors of the Canadian economy, like telecom and banking, remain extremely closed to foreign competition, and as such reap the excess profits typical of oligopolies. There's nothing like a threatened profit squeeze to entice a business to become leaner and more productive."
TAMMY SCHIRLE – professor of economics, Wilfrid Laurier University
"I would like to see a general reduction in distortionary tax measures that are designed to redistribute resources toward high- and middle-income families. Several boutique tax credits should be eliminated – particularly things like the children's fitness non-refundable tax credit that effectively gives high-income families a discount on their children's activities (but not low-income families with a low federal tax payable) and have very high administrative costs for non-profit organizations that need to provide tax receipts. I would also like them to seriously reconsider the introduction of income splitting (the Family Tax Cut), as it will represent a massive tax expenditure that primarily benefits a subset of high-income families (high-income, single-earner families to be more precise). It also raises the marginal tax rate for secondary earners in a family, reducing labour supply incentives where the labour supply elasticity is highest."
CLÉMENT GIGNAC – chief economist, Industrial Alliance Insurance and Financial Services Inc.
"One thing we would like to see addressed in the Throne Speech is measures to foster competitiveness and particularly investment across Canada. According to the World Economic Forum, Canada has lost ground over the past five years in terms of competitiveness, falling from 10th to 14th place. More disturbing, Canada ranks 21st regarding innovation in 2013 (versus 13th in 2008). Innovation, entrepreneurship and access to capital are interconnected. The government could emphasize the role of venture capital, help create an environment that is conducive to innovative activity, and make sure that investment in R&D reaches a sufficient level."