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Begin New Search Topic International Trade and Finance Political Geography Canada Publishing Institution The Organisation for Economic Co-operation and Development

1. Economic Survey of Canada, 2004

Publication Date:
10-2004
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Economic performance has been solid, and macroeconomic policies are appropriate. The economy is expected to expand by close to 3.5 per cent in 2005, and the output gap will soon be closed. Monetary stimulus should gradually be removed and the fiscal policy stance needs to remain neutral. The Canadian dollar appreciated sharply in 2003 and is now probably not far from its fundamental value. Canadian firms will need to continue to adjust by making efforts to improve productivity to maintain competitiveness. Policy makers should remain focussed on policies that enhance productivity growth across all sectors. With a sound macroeconomic framework and structural policies that are mostly conducive to a well functioning economy, the country is well placed to meet the challenges of an ageing population, namely, maintaining rises in living standards through strong rates of productivity growth and policies to attenuate the expected fall in hours worked on average across the whole population, and ensuring that public finances are sustainable, especially given pressures on health care outlays.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Canada and North America

2. Economic survey of Canada, 2003

Publication Date:
09-2003
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Canada's economy has done comparatively well over the past two years, demonstrating a noticeably improved resilience to unfavourable shocks. Over the medium term the economy is poised to achieve growth rates that compare favourably with past performance, but that will not be enough to eliminate the per capita income gap with the United States. The fundamental challenge is to make Canada an even more attractive place to live, work and invest. While past reforms have begun to pay off, there is still unfinished business. To boost the employment rate further the government should reduce disincentive effects arising from the tax and benefit systems by, for example, making greater use of in-work benefits and reintroducing experience rating of Employment Insurance users. Faster productivity gains are more likely to be achieved in an economic environment conducive to innovation. A key to greater dynamism is strengthening competition by eliminating remaining foreign ownership limits and barriers to internal and external trade and continuing electricity deregulation. Investing in skills should also remain a priority, with a particular emphasis on adult education. The nation has benefited by importing human capital from abroad through immigration but needs to intensify its efforts to remove the obstacles that prevent immigrants from having their skills fully utilised in the labour market. Having introduced a sound fiscal framework and reformed its public pension system Canada is in a better position than most other countries in facing ageing-related fiscal challenges, but the trend rise in health-care costs remains a risk. With the recent budget the government chose to address the short-term needs of the existing system. But, ultimately, ways to control the rise in budgetary costs - whether through incentives to raise efficiency or through cost sharing - will need to be explored, otherwise the resources needed to finance the future burden should be set aside in advance, for example by setting a bolder debt reduction target. Finally, environmental sustainability will be enhanced with least cost to the economy if the ambitious greenhouse gas emissions reduction is achieved through market-oriented instruments rather than command and control measures or voluntary agreements.
Topic:
Diplomacy, Economics, International Organization, International Trade and Finance, and Political Economy
Political Geography:
United States and Canada