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Archived - 6. A Competitiveness Agenda for Canada

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What we have heard consistently and what we learned through our work as a Panel is that competition in the global context is becoming more intense as powerful new competitors emerge. We heard this from those who had taken on new global challenges, as well as from those who expressed deep concerns about the potential for lost markets, lost companies, lost jobs and a reduction in living standards.

The biggest impediment to success for Canada lies in the lack of consensus about what the problem is, what needs to be done to solve it, and whether it constitutes the "imminent crisis" referred to earlier. Many voices argue for the status quo, which makes it even more difficult for us to recognize that difficult but important choices are required for Canada to keep pace with the rest of the world.

In this report, the Panel lays out the evidence underlying its conclusions about the nature of the problem and the urgent need for changes to Canadian public policy and the mindset of Canadians.

In the past, Canadians faced changing and adverse economic conditions, overcame risks and took great strides to improve our competitiveness, beginning with the implementation of the Canada–US Free Trade Agreement in 1989, the introduction of the Goods and Services Tax in 1991 and the signing of the North American Free Trade Agreement in 1994. We eliminated the federal government deficit by 1997. We can do great things again.

However, we have rested on the laurels of these successes. In the ensuing years, our public policy and political debate has been more about dividing the spoils, much of it due to past decisions and the good fortune of our natural resource endowments, rather than to increasing wealth and expanding opportunity. Global forces are putting pressure on Canada, like all nations, to revisit its economic position. Canada must take concerted action to remain current with competitive realities. We must plan and prepare for the future. We must act.

The Panel wants to establish the right conditions for Canada to ensure a high and rising standard of living for its citizens. These include:

  • a world-class business environment to attract talent and capital
  • strengthened businesses through competition, the essential driver of productivity and innovation
  • more effective collaboration between businesses and all levels of government.

Such conditions will create more and better-paying jobs for Canadians now and for the next generation, and will generate more wealth to support our national objectives, including social and environmental goals. We are not saying that this will be achieved instantly by changing specific policies or without economic stress and dislocation. We are saying that the benefits will far outweigh the costs and that failure to act will result in declining opportunity and prosperity for Canadians.

Canada must improve its productivity by increasing competitive intensity. A precursor to succeeding internationally is the need to ensure that domestic markets are healthy and that unnecessary barriers to entry are reduced or eliminated. The freer flow of goods and services will import greater competition into our domestic markets. Canadian firms will have to sharpen their "competition tools" to take on the increased competition from outside. Greater competitive intensity domestically will translate into more success in world markets.

We turn now to the Competitiveness Agenda proposed in this report. Our Agenda focuses on talent, capital, innovation and an ambitious mindset. These are the areas that we believe require the most attention. Underlying our Agenda are the principles of openness and collaboration.

The remaining chapters of this report deal with our views and findings as well as the actions we recommend to address the concerns we have raised.

Chapter 7 reviews the legal underpinnings for competition in Canada. We look first at the core elements of our mandate — the Investment Canada Act, a number of sectoral regimes and the Competition Act. In public policy areas where market forces are constrained by regulation, the government must ensure that the objectives remain relevant and that the least restrictive mechanisms required to achieve them are being utilized.

In Chapter 8, we provide our views on public policy priorities for action that were raised during our deliberations and that we consider to be critical for Canadian competitiveness.

In Chapter 9, we recommend a powerful voice for competition advocacy in Canada. It is our hope that competitiveness will become a central pillar of Canadian economic policy and will be sustained long after the publication of this report.

At the outset, we state that this report is about one basic idea — raising Canada's economic performance through greater competition to provide Canadians with a higher standard of living. The balance of the report sets out an agenda to achieve this goal.