Canada finds itself in an economic stagnation, where despite adjustments for inflation and immigration, the economy remains smaller than pre-pandemic levels and has shown minimal growth over the past decade.
In response to these challenges, RBC has launched The Growth Project, a comprehensive initiative focused on revitalizing Canada’s economic trajectory. This initiative aims to provide crucial insights into enhancing productivity, leveraging AI, optimizing the agriculture sector, improving immigration policies, advancing trade strategies, and fostering skills development. The goal is to propose actionable strategies that can effectively address Canada’s economic growth challenges.
“Canadians are deeply concerned about economic uncertainty, marked by low growth and rising costs,” said John Stackhouse, SVP, Office of the CEO at RBC. “RBC is actively engaging stakeholders nationwide to explore innovative solutions that can steer our economy toward stronger growth. We are also strategically investing to empower Canada’s workforce to meet current and future labor market demands.”
Today, RBC Economics & Thought Leadership unveiled the inaugural research report under The Growth Project titled “Canada’s Growth Challenge: Why the economy is stuck in neutral.” This report delves into the factors contributing to Canada’s stagnant growth, highlighting issues such as declining productivity despite increased work hours and a significant productivity gap compared to the United States.
Nathan Janzen, assistant chief economist at RBC Economics & Thought Leadership, emphasized, “Our analysis reveals that Canada’s productivity growth has been consistently below 1% annually since 2000. Addressing this challenge requires tackling complex issues like business investment constraints and regulatory burdens.”
The report identifies five key policies that could stimulate growth across Canada:
- Cutting Red Tape and Internal Trade Barriers: Streamlining project approvals and reducing costs associated with new investments.
- Harnessing Immigrant Skills: Enhancing recognition of foreign credentials, particularly in healthcare, to fill labor shortages and boost productivity.
- Improving Tax Competitiveness: Simplifying tax rules to encourage compliance and support new businesses and low-income households.
- Adopting New Technologies: Promoting AI and other innovative technologies to enhance competitiveness and efficiency.
- Developing a Highly Skilled Workforce: Expanding work-integrated learning programs to align skills development with labor market needs.
While policy reforms are crucial, fostering a national growth mindset is equally vital, according to Canada’s Growth Challenge. Embracing innovation, competitiveness, and strategic investments in technology and human capital could pave the way for sustainable economic growth.
In addition to its research efforts, RBC is actively investing in Canada’s workforce development. The RBC Foundation has committed $2 million to five Atlantic Canada colleges to support green skills education. Initiatives include developing electric vehicle programs, wind and solar technician training, and green retrofit projects aimed at enhancing energy efficiency.
For more information on The Growth Project and to access the full report “Canada’s Growth Challenge: Why the economy is stuck in neutral,” visit RBC’s new Growth Hub.
