Setting our sights on Canada’s 2020 Prosperity Agenda
Canada has one of the most prosperous and competitive economies in the world. But we are not living up to our full economic potential. The Institute for Competitiveness & Prosperity, in its fifth Report on Canada, Setting our sights on Canada’s 2020 Prosperity Agenda, proposes the 2020 Prosperity Agenda as a way of contributing to the national discussion on realizing our prosperity potential.
Canada’s Gross Domestic Product (GDP) per capita ranks second among countries with a population greater than 10 million. But against the United States, Canada continues to fall further behind. In 1981, Canada’s GDP per capita was $3,000, or less than 10 percent behind US GDP. Over the intervening years, the gap has widened and now Canada trails the US by $8,800, or 17 percent, per person.
This gap represents lost prosperity, which matters to all Canadians. In its Report on Canada last year, the Institute set out its Agenda for achieving this potential by 2020. This year, the Institute reviews progress and identifies the key next steps to put Canada on the path to achieving this Agenda.
Lagging productivity continues to be the biggest barrier to closing the gap. The Institute points out that productivity growth comes from innovation, not just efficiency improvements. The Institute is proposing a wide range of initiatives to encourage and support innovation.
Another priority is to build a smarter tax system to raise motivations for businesses to invest. The Federal Government is taking dramatic action to give Canada an environment more conducive to business investment. Its fall 2007 economic statement puts in place significant reductions in corporate income tax rates. Ontario - and other provinces - need to follow suit.
The Institute continues to urge governments to increase their investment in education and points out that this is starting to occur, especially in Ontario. Its research in the area of poverty points to the importance of a high school diploma and other formal skills. At the post-secondary level, the Institute urges an examination of the balance between research and student experience in our universities.