As we turn 156, it’s no wonder the world wants more Canada

As Canada Day approaches, there is much to celebrate about a healthy Canadian economy with bright prospects, though the country may not give that impression.

Canadians face historically high inflation and interest rates, and housing and skills shortages.

And we are gearing up for a long overdue recession.

Our colleagues face many of the same challenges.

And the more important longer-term outlook for Canada is encouraging.

Canada’s population growth rate exceeds that of most industrialized economies, and Canada has the fastest economic growth in the G7, apart from the US

Some economists predict that Canadian GDP growth in 2025 will also overshadow that of the US.

Canada is believed to be a mature, slow-growing economy, the eighth largest in the world by some measures. But in recent years it hasn’t behaved that way.

With a size of approximately $2.8 trillion by 2022, a dynamic Canadian economy has grown by almost 30 percent in just five years.

And the economy has diversified as it grew. That’s according to a Canadian stock market where technology stocks now account for more than 10 percent of the total value of the S&P/TSX Composite Index, nearly double their 2015 level.

Since early 2021, the S&P/TSX has outperformed the Bloomberg World Index of global stock markets. For example, on June 20, one of the most recent comparisons available, the gap was pronounced, with the Canadian market gaining 13.6 percent compared to a 4.3 percent increase in the global average.

The stock market is just one proxy for the economy.

Another is exports, which reached a record $822 billion in the third quarter of 2022.

Exports are poised for further growth as some of our major trading partners, notably China, fully recover from the pandemic-induced economic slowdown.

And Canadian exporters are still not taking full advantage of the free trade opportunities offered by Ottawa’s historic trade agreements with the European Union and in the Asia-Pacific.

Yet another measure is the robust health of Canada’s labor market, which has grown steadily in turbulent economic times to its current record of 20.1 million workers. The Canadian economy remains at near full employment for the first time in decades.

The International Monetary Fund (IMF) noted earlier this month that “Canada’s national debt is relatively low by international comparison.”

At a federally forecast 42.4 percent in fiscal 2022-23, Canada’s debt-to-GDP ratio is expected to remain lower than that of our G7 peers.

In May, Ottawa reported a federal deficit for fiscal 2022-23 of $41.3 billion, down from $90.2 billion in the prior fiscal year.

That significant decline confirms Ottawa’s projection of a federal deficit that will shrink from the pandemic high of $327.7 billion in fiscal 2020-21 to $14.0 billion in 2027-28.

And it’s not just that “the world needs more Canada.” The world want to more Canada.

Many major economies, including China, will face a population decline in the coming years due to low fertility rates and xenophobia.

In contrast, in 2022 Canada welcomed more than 1 million new Canadians in one year for the first time.

Statistics Canada predicts that Canada’s population could reach 50 million by 2043 if current trends continue.

“Unlike all his peers in the developed world, (Prime Minister Justin) Trudeau managed to show 40 million fellow citizens the benefits of immigrationwhat is reflected in the performance of the economy,” Matthew Winkler, editor emeritus of Bloomberg, recently wrote.

Also increasingly attracted to Canada are foreign investors. Over the past two years, they have poured tens of billions of dollars into Canada’s technology, auto, mining, agriculture, clean energy and other economic sectors.

And the Canadian state’s investment in 21st century industries matches that of last year’s landmark U.S. Inflation Reduction Act (IRA).

Those investments, by Ottawa, the provinces and their business partners at home and abroad, extend beyond the largest government investments in electric vehicles (EV) and EV batteries.

They are also embracing semiconductors, innovative farming practices, breakthrough pharmaceuticals, and decarbonization innovations. For example, in Hamilton and Sault Ste. Marie, steelmakers are using state aid to experiment with making “green steel” from hydrogen instead of coal.

Again, the building blocks of greater future prosperity include more of the immigrants who have built Canada since before Confederation.

And healthy public finances.

And substantial public and private investment in the technologies and industries that will define the 21st century.

Canada’s 156-year project to create a near-perfect country is a work in progress. There is still much work to be done in areas such as health care, affordable housing, indigenous reconciliation, closing the gender pay gap and more.

Best wishes to all of you, for an enjoyable celebration of Canada Day.

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