8 February 2005

Canada could be left behind, Emerson warns

The following article is excerpted from the 8 February 2005 edition of “globeandmail.com”.

Industry Minister David Emerson says the Canadian economy is "dangerously close to being left behind" if governments and businesses don't make dramatic changes to boost competitiveness.

As one of the world's most trade-dependent countries, Mr. Emerson said yesterday in a speech to a Canadian Manufacturers and Exporters conference in Ottawa, Canada must become the most competitive nation in which to do business "or the next generation will pay the price."

The national economy, manufacturers in particular, have been facing fresh challenges since the Canadian dollar started to appreciate against its U.S. counterpart more than a year ago. …

Mr. Emerson listed a series of changes that the public and private sectors need to make: smoother flow of trade across the Canada-U.S. border, lower taxes, greater investment in human skills, more liberal recognition of foreign-trained workers, fair bilateral trade with China, more effective regulations, more investment in research, and a new approach to Technology Partnerships Canada, a federal corporate support program.

"Change is not an option," he said during the speech. "It is an imperative."

When asked later by reporters how much the economy's competitiveness must improve, however, Mr. Emerson quoted a study by the University of Toronto's Rotman School of Management that listed Canada as the industrialized world's second-most-competitive economy behind the United States….

Jay Myers, an economist with the Canadian Manufacturers and Exporters, said, however, that Canada remains a high-cost place to do business. His group, along with other business organizations, has called on the federal government to use part of its projected $8.9-billion budget surplus to lower corporate taxes as part of a broader competitiveness agenda….

Mr. Emerson told reporters that Ottawa will consider cutting business taxes in the coming federal budget.

"I think [Finance Minister Ralph] Goodale continues to look at corporate taxes," he said. "We're absolutely committed to a competitiveness agenda and of course taxation is part of that."…