TORONTO: Justin Trudeau wants to build a Canadian economy that will thrive a decade or more from now – if that means losing a short-term edge to Donald Trump, so be it.
The Canadian prime minister outlined his economic vision on Tuesday, championing investments in education and healthcare, targeted immigration and responsible borrowing as ways to quell populist unrest and build a thriving society. Noticeably absent was any talk of tax cuts mirroring those in the US, which he called a more “ruthless” economy propped up by unsustainable deficits.
“If you’re making a decision purely based on how you could maximize your profits in the short term, maybe Canada is not the right choice for you – but that’s not the way more and more successful companies are really approaching their thinking,” Trudeau told Bloomberg’s Stephanie Flanders on Tuesday in Toronto.
“We’re not engaging in a race to the bottom. We’re very much looking for where the economy is going – where it’s going to be 10 years from now, where it’s going to be 30 years from now?”
Trudeau is an outspoken advocate for policies supporting what he calls inclusive growth, in particular doing more to help women and girls succeed. It’s an economic philosophy he’s set to champion when he hosts the Group of Seven leaders’ summit next week in Quebec, and one set surely to clash with Trump’s vision. Trudeau’s plan was on full display in other parts of the interview – warning Canadian Pacific Railway Ltd he wouldn’t quickly end any strike and defending a decision to nationalise Kinder Morgan Canada Ltd’s Trans Mountain pipeline.
Canadian business groups have called on Trudeau to address weakening competitiveness, and many warn the country has lost an edge partly because of US tax cuts, but also due to accumulating red tape, new policy measures and the threat posed by Trump’s trade policies.
Trudeau, in a venue, steps from the country’s Bay Street financial corridor, dismissed that by saying US tax cuts aren’t manageable in the long term and social unrest could hurt profitability.
“What’s the US debt approaching now, is it a trillion dollars?” he said, though it was unclear if he was referring to the debt or deficit. “We’re talking about something that is not sustainable” and “we have to ask the question whether the tax cuts that they’ve brought in in the United States are sustainable in terms of long term fiscal stability.” Barring some women, visible minorities and other marginalized communities from a path to success is also “going to continue to exacerbate tensions that ultimately aren’t profitable for business,” he said.
Canadian economic growth at 3% led the Group of Seven in 2017, but is forecast to slow to 2.1% this year, trailing the US and Germany. Its deficit is expected to be a modest 0.8% of gross domestic product, according to the federal budget, placing it among the best in the G-7.
Trudeau is set to stress gender measures when G-7 leaders meet on June 8 and 9. “This is an argument, and a very compelling argument, that you create better success, better growth for our countries and our world when we include women,” he said.
Canada has social, economic, fiscal, monetary and political stability, Trudeau said, pointing to education programs, worker benefits, a fast-track immigration program for skilled workers and environmental measures.
“There are an awful lot of companies and wealthy individuals who realize that that is a much more sustainable path for the long term than -- than the short-term approach that perhaps the US is taking right now,” he said. Canada’s economy is about more than having a low dollar and low corporate tax rates, he said. “The US has always been much more focused on the ruthless competition of success on the single bottom line.”
Maybe because of the winters or the great distances between communities, Canadians have “always know that we have to be there for our neighbours. We have to make sure that they’re a success for all of us,” the prime minister said. Far from leading to decline, his policies will bring political stability and consumer-led growth, he said.
“I have no worries that businesses are going to be able to be profitable and do very well when more people have confidence and money to spend,” he said.
“Perhaps it flies in the face of the trickle-down economics that people are still clinging to, but I don’t believe in those.” — Bloomberg