Report highlights long-standing economic trends that must be reversed in course of COVID-19 response
For many Canadians, recovering from the COVID-19 pandemic’s impact means getting the country back to its original economic trajectory. But according to a new report from Deloitte, even that’s not good enough.
In Catalyst: A vision for a thriving Canada in 2030, researchers from Deloitte projected that a return to pre-pandemic conditions would lead to a base case of slowed-down real GDP growth to just 1.7% per year, compared to the average 2.2% seen over the past decade.
“[T]he sluggish growth rate is driven by long-standing trends limiting Canadian productivity: slowing labour force growth, weak additions to the capital stock, and insufficient innovation,” the report said.
Aside from its aging population, Deloitte said Canada’s economic outlook is darkened by weak investment in machinery and equipment within the private sector, as well as sluggish productivity growth as measured by GDP per employee.
To get away from that path, Deloitte said Canada must focus on three priority areas: people, industries, and systems that support society. With the correct action and a long-term vision, it said, Canada can lead the G7 in economic growth and job creation. Its annual GDP growth rate could accelerate to 2.7%, and it could become a more attractive destination for both business and global talent.
“Canada's future can be brighter, if we take action now,” Anthony Viel, managing partner and chief executive, Deloitte Canada, said in a statement. “We must set our differences aside and take action with both the same urgency and collective spirit as we did, and continue to do, in response to COVID-19.”
The report set out some key recommendations for governments, business leaders, and citizens including, among others:
- Take targeted action to address labour market barriers for underrepresented groups;
- Enable gender equity in the workforce by providing access to affordable childcare;
- Align education systems better with the realities of the job market;
- Accelerate investment in digital and physical infrastructure to foster the emergence of globally competitive companies;
- Invest in sectors where Canada can realistically lead;
- Build a much more flexible social safety net;
- Develop a national strategy for seniors and aging; and
- Chart a course to decarbonization.
“Although we are all unsure of what the next 10 years will bring, we must set our sights on the big picture — facing up to the challenges now, not turning away, and most importantly, working in lockstep for the desired outcomes,” said Georgina Black, managing partner, Government & Public Services at Deloitte Canada.
