Former Bank of Canada Governor Warns of Severe Compromise to Canada’s Prosperity Without Increased Productivity
The former governor of the Bank of Canada, Mark Carney, has issued a warning that the prosperity of Canadians could be at risk if the federal government fails to improve productivity.
During a keynote address at Canada 2020’s Economic Lookahead dinner in Toronto on April 22, Mr. Carney emphasized the importance of acknowledging the decrease in productivity that has led to reduced spending capacity for Canadians.
He highlighted the global economic shifts due to factors like transitioning to green energy, advancements in artificial intelligence, higher inflation, and protectionist policies. Mr. Carney pointed out that this changing landscape has resulted in weaker private growth and less effective government interventions in countries like Canada.
He emphasized the need for governments to focus on boosting productivity and cautioned against excessive spending with insufficient investment, which could lead to severe consequences in the long run.
In response to the changing economic landscape, Mr. Carney proposed a “mission-oriented capitalism” approach that combines fiscal discipline with a focus on innovation and sustainable growth. He cautioned against simplistic solutions and emphasized the importance of balanced economic strategies for long-term success.
‘Mission-Oriented Capitalism’
Mr. Carney criticized approaches that either rely solely on increased government spending or advocate for drastic cuts in government programs. He argued for a middle-ground approach that prioritizes both economic stability and innovation to ensure sustainable growth.
He specifically called out the Conservative Party’s proposal to eliminate the federal carbon tax, warning that such actions could hinder competitiveness and job growth in the country.
Mr. Carney stressed the need for a holistic approach that combines resilience, purpose, and dynamism to achieve strong and inclusive growth for Canada’s future prosperity.
