John Ruffolo is chief executive officer of OMERS Ventures and vice-chair of the Council of Canadian Innovators.
Our country faces a tall order. Since the financial crisis in 2008, Canada's financial house has looked in order compared to most countries. But I'm concerned that Canada is squandering a unique opportunity for our future – a future based on growth.
Ottawa believes we have a problem in our stagnant gross domestic product growth, averaging about 1.5 per cent annually since 2008 yet only 0.5-per-cent growth per capita in Canadian dollars and an alarming negative 1.8 per cent annually in U.S. dollars. The federal government is looking to identify ways to "overcome the challenges posed by an aging population as Canada seeks to achieve sustainable, long-term growth."
Without higher growth, where will we find the revenue to pay for health care, education and infrastructure? Some economists suggest that if we don't generate sustainable GDP growth of 3 per cent a year, our treasured social programs will suffer. We are currently a long way from that target.
There are essentially two primary methods of stimulating GDP growth – by increasing productivity, largely through innovation, or by increasing the available labour pool. The Minister of Innovation, Science and Economic Development is leading a consultation focused on stimulating productivity through innovation. I applaud this, as it seeks to identify the tactics we need from experienced players, including the CEOs of our fastest-growing innovation scale-ups.
Ottawa is also right to zero in on the grey wave washing across our country, given the proven link between demographics and growth. As Peter Zeihan, author of The Accidental Superpower, has observed, the mass retirement of Canadian baby boomers also means a big increase in the consumption of health care and other entitlements. He notes that Canada has one of the world's fastest-aging demographics.
Responding to this shift means pushing hard on both the innovation and labour pedals – especially the latter. The more talented working-age people we can attract and keep, the better positioned we will be to increase our productivity, which ranks very low among Organization for Economic Co-operation and Development countries. CEOs will tell you that access to talent is their primary barrier to scaling up.
This is precisely where a population boost can help. For 25 years, Canada has welcomed an average of about 250,000 immigrants a year. We have a population density of about four people per square kilometre (versus 35 in the United States).
Canada needs a robust national access-to-talent strategy. We should increase immigration. By 2025, 30 per cent of our population will be 60 and older – to mitigate this imbalance, Canada would need to increase immigration for each of the next five years to one million people. If we focus this intake on skilled newcomers between the ages of 20 and 39, it would shift our overall proportion of that band from 25 per cent to 32 per cent of the population.
Without such a strategy, Canada may face stark choices: tax increases, greater national debt or scaled-back social programs.
Some people might call this plan bold. But I hesitate to say that, because scaling up Canada's economy through immigration is an old idea. From 1901 to 1911, our country's population increased from 5.4 million to about 7.2 million, with immigration accounting for the entire net increase. That's a 33-per-cent increase. By comparison, a goal of one million people for each of the next five years is comparatively modest – 41 million people represent a population increase of just 14 per cent.
The initiative needs to be phased in carefully, utilizing our internationally recognized due diligence and screening processes to align with our labour needs. We must move from a passive intake system to one where we actively recruit more people who can succeed and help increase our capacity for innovation and productivity. This includes new science grads, skilled tradespeople and investors with capital.
We could look at opportunities to fast-track visas for foreign workers, particularly for highly skilled jobs in the innovation sector. We could fast-track foreign students educated in Canada for permanent residency, and target students at leading foreign educational institutions. For some industries, it may also be appropriate to look at re-instituting the temporary foreign worker visa. We can also look at doing more within the North American free-trade agreement framework.
We must also put in place an emigration strategy. We've exported tremendous Canadian-trained expertise that can and should be enticed home – University of Waterloo graduates "are the second-most-frequently hired in Silicon Valley behind students from University of California, Berkeley," according to The Wall Street Journal.
While other countries shut immigrants out, Canada remains inviting. Diversity is our most important natural resource. And we should continue to express this by being a haven for refugees and family reunification.
But in this mobile world, being open to newcomers is one thing – retaining them is another. Keeping our most talented workers means thinking big about infrastructure, which is vital to quality of life. Our infrastructure spending needs to deliver first-class transportation, hospitals and educational institutions, especially in the larger cities that tend to receive the most immigrants.
We have many other policy levers available to us when it comes to talent. What we don't have is endless time for study. Our competitors aren't standing still, and neither can we.