TORONTO, June 4, 2024 /CNW/ - Canada is stuck in an economic rut. Our economy, when adjusted for inflation and immigration, is smaller than it was before the pandemic -- and pretty much in the same place it was a decade ago.
Against this backdrop, RBC is launching The Growth Project, a multi-part initiative focused on Canada's economic growth trajectory. The initiative will offer key insights into productivity, AI, the agriculture sector, immigration, trade, and skills development, and will propose actionable strategies that can help solve Canada's growth problems.
"Canadians are telling us that economic uncertainty -- low growth yet higher prices -- is their top concern. Addressing these issues has become a key focus for RBC. We're convening stakeholders across the country -- exploring ideas and solutions that can put our economy on a better growth track. We're also making strategic investments to help Canada's workforce meet current and future labour market needs," said John Stackhouse, SVP, Office of the CEO.
And today, RBC Economics & Thought Leadership launched the inaugural Growth Project research report titled Canada's Growth Challenge: Why the economy is stuck in neutral. The report explores the conditions that have led to Canadians working more, but producing less and explains why our collective productivity is our country's most pressing economic challenge.
"When we look at the Canadian economy since the turn of the century, it's clear that our growth has stagnated. On average we've seen productivity growth of less than 1% per year. The problem is even more acute when we compare Canada's growth against that of the United States where our per-capita GDP runs 30% below U.S. levels," said Nathan Janzen, assistant chief economist, RBC Economics & Thought Leadership.
"It's a multitude of issues contributing to the problem -- from a lack of business investment to cumbersome tax regulation. What our research shows is that the solutions are not easy to implement but are clear and attainable."
Canada's Growth Challenge identifies five growth-positive policies that would benefit business owners and workers alike:
- Cutting red tape and reducing internal trade barriers: Increase the speed and predictability of project approval times and lower potential holding costs for businesses planning new investments in Canada.
- Better utilization of immigrant skills: Recognizing the credentials of foreign-trained professionals in fields like healthcare to increase the productivity and earnings of those workers and help address the chronic undersupply of those workers in the labour market.
- Improving tax competitiveness: Policymakers should aim to make sure tax rules can be easily understood to encourage compliance, especially among those that are most in need of the benefits, i.e., new businesses and lower-income households.
- Adopting new technologies: "Smarter" investments like artificial intelligence can help but adoption rates are low in Canada. Making it easier to invest in new technologies is critical to maintaining global competitiveness, improving the efficiency and predictability of Canada's complicated project approvals system and simplifying the tax system would benefit these investments.
- Capitalizing on a highly educated workforce: Increasing the utilization of work-integrated learning placements (co-ops and internships) would help to better match the developments of skills in the economy with current and future labour market needs.
And while policy solutions can be powerful tools to enhance growth, equally important is the need for Canada to embrace a growth mindset. Canada's Growth Challenge argues that if Canadians developed a collective focus on the economy of the future -- one that rewards innovation, celebrates competitiveness, invests in both people and technology, and efficiently delivers returns -- the productivity puzzle may become easier to solve. And with it, growth will return.
Preparing Canadians for the workforce of tomorrow
In addition to driving key insights about Canada's growth and productivity challenges, RBC is helping Canadians develop the skills they need to excel in tomorrow's workforce. Reinforcing this commitment, the RBC Foundation is making a total of $2 million in donations to five Colleges in Atlantic Canada to support green skills education and training across the region.
The College of the North Atlantic and Collège communautaire du Nouveau-Brunswick will apply the donations to develop Electric Vehicle education and applied skills training programs. The Nova Scotia Community College and New Brunswick Community College Foundations will use the donations to support wind and solar technician training programs, to help address the growing demand for this skilled labour workforce in both provinces.
In PEI, a donation to Holland College Foundation will help fund a four-year green retrofit project, to transform an existing campus residential property into a model of energy efficiency and sustainability.
You can learn more about The Growth Project and read the Growth Challenge: Why the economy is stuck in neutral on RBC's new Growth Hub.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 98,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our more than 18 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.
SOURCE RBC
Kyle English, RBC Economics & Thought Leadership, [email protected]
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