FINA Committee Report

Having concluded our pre-budget consultations for 2006 on the theme of competitiveness, it is clear to the Committee that there is an urgent need to begin improving our productivity performance and to take other actions that will improve the nation’s competitiveness. While the Advantage Canada: Building a Strong Economy for Canada initiative announced by the Minister of Finance on 23 November 2006 contains a number of elements that we believe will move the country forward, ongoing vigilance as well as some actions not identified in the initiative will be required if we are to meet our competitiveness objectives.

While productivity performance is not the only factor that contributes to competitiveness, it is an important consideration. Clearly, our productivity performance, our competitiveness and our standard of living are linked. The influence of productivity growth on competitiveness and on living standards accumulates over time, with some of its effects becoming apparent only over decades. We must act now to improve our productivity performance — and, ultimately, our competitiveness — in the future.

The sense of urgency is only enhanced when the importance of productivity growth as a tool to address the continued ageing of the Canadian population is considered. An annual productivity growth rate of 1% would lead to a doubling of living standards in 70 years; an annual growth rate of 3% would double living standards in 24 years.

A second observation is that the Committee heard a number of requests for the federal government to develop national strategies with stable, long-term, statutory funding. These requests were received on a wide variety of issues, many of which are not within federal jurisdiction. Witnesses, and perhaps Canadians more generally, are focused on the outcome of governments’ decisions regarding taxation, spending and regulation. As such, they explore all channels available to them — federal, provincial/territorial, municipal and private sector — when seeking change on behalf of Canadians, Canadian businesses and the nation as a whole. In our view, Canadians believe that all orders of government must work together in the interests of Canada and Canadians.

During the pre-budget consultations, the Committee heard requests in the areas of health, lifelong learning, incentives to work and incentives to save that are designed to make our people more competitive, requests in the areas of infrastructure, the environment, charitable giving and volunteerism, and arts and culture that are designed to make our communities more competitive, and requests in the areas of corporate taxation, research and innovation, international trade and international aid that are designed to make our businesses more competitive.

The Committee’s third — and final — observation is that witnesses presented us with an overwhelming number of innovative ideas for improving the competitiveness of our people, our communities and our businesses. While we are not able, in this report, to make recommendations about the full range of ideas, we thank the witnesses for contributing to the pre-budget consultation process for 2006, and urge the federal government to examine each submission that was made to us. Many ideas deserve further exploration as we seek to develop a strategic focus on the actions that must be taken to enhance our competitiveness as a nation.

Our productivity growth rate is too low. Our competitiveness is not as great as it should be. The time for action is now.