Transcript Slide 1

OECD Economic
Survey of Canada 2012
Peter Jarrett and Alexandra Bibbee
June 14, 2012
Macroeconomic
developments and policies
Real GDP growth
Quarter-on-quarter, annual rate, %
Economic slack is diminishing
Inflationary pressures are emerging
Year on year growth, in per cent
g
Currency strength is weighing on exports
Canadian-US dollar exchange rate, and ratio
The share of manufacturing in real GDP
Canada versus the United States
The share of manufacturing in total
employment
Canada versus the United States
The shifting pattern of real per capita income
As a share of the national average
Short-term projections
Annual percentage change, volume (chained 2002 CAD)
2011
2012
2013
Private consumption
2.2
2.4
2.9
Government consumption
1.2
0.2
-0.5
Gross fixed capital formation
6.9
3.9
5.0
2.3
3.7
2.6
13.7
7.1
7.2
Total domestic demand
3.2
2.0
2.7
Exports of goods and services
4.4
5.2
6.2
Imports of goods and services
6.5
4.3
6.3
GDP at market prices
2.5
2.2
2.6
Demand and output
Private residential
Private non-residential
Short-term projections (continued)
Annual percentage change, volume (chained 2002 CAD)
2011
2012
2013
Consumer price index
2.9
2.3
2.2
Underlying price index
1.7
2.1
2.0
Total employment
1.5
1.1
1.1
Unemployment rate
7.5
6.9
6.6
General government financial balance1
Cyclically adjusted government primary
balance1
-4.5
-3.5
-2.4
-3.7
-2.9
-2.1
General government gross debt1
83.8
84.5
81.4
General government net debt1
33.3
35.3
36.3
1.2
1.3
2.1
Current account balance1
-2.8
-2.4
-2.3
Output gap (per cent of potential GDP)
-1.1
-1.0
-0.6
Prices and employment
Memorandum items
Short-term interest rate
1.
As a percentage of GDP.
Households’ indebtedness indicators
Debt-to-disposable income ratios, 2010
Residential investment as a share of GDP
Nominal house prices
Index, 2000 q1 = 100
House price to income ratio
Index, 2000 = 100
House price to rent ratio
Index, 2000 = 100
Mortgage service ratio and long-term average
Per cent
1. The proportion of the average personal disposable income per worker that goes
towards mortgage payments on a quarterly basis based on current house prices and
mortgage rates.
Unoccupied housing completions
Share of total completions by type
Monetary and financial policy recommendations
• Maintain the current official rate for now (and
cut them further if a crisis ensues)
• If downside risks avoided, start removing
stimulus in the fall and continue through 2013
(125 basis points)
• Follow through on macroprudential moves,
especially having CMHC supervised by OSFI
• Implement as comprehensive a securities market
regulator as possible
Net debt as % of GDP
Share of market-based income inequality
offset by the tax and transfer system
Health care expense indicators
1. CIHI projections.
Population 65 years of age and over
Percentage of total
Fiscal policy recommendations
• Implement consolidation plans as budgeted, but
slow it if prospects weaken significantly
• Implement rise in pension age as planned
• Eliminate inefficient tax expenditures, especially
those that are regressive
• Adopt a target long-term public debt ratio
Unleashing business
innovation
•The Canadian puzzle
•Innovation drivers
•Policy solutions
Economic Performance of Canada relative
to the United States
Total economy
Research and development expenditure
As a percentage of GDP
ICT investment in Canada relative to USA
USA = 100
Science and innovation profile of Canada
2010 or latest available year
Intangible investments, selected OECD
countries
Business sector, as a per cent of GDP
Computerised
information
Software
Australia
(2005-06)
Canada
(2005)
Japan
(2005)
United
States
(2007)
EU27 +
Norway
(2005)
Economic
competencies
Innovative property
Total
Scientific
R&D
Mineral
exploration
Other
Firm
specific
capital
Brand
equity
0.77
0.82
0.26
1.17
0.87
2.02
5.90
1.03
1.83
1.14
2.03
0.49
3.26
9.78
2.14
2.88
0.00
2.95
1.14
1.56
10.67
1.38
1.82
1.01
1.82
1.43
4.01
11.43
1.04
1.04
n.a.
1.31
0.93
2.16
6.49
Share of high technology manufacturing
in GDP
2009 or latest available year
Business R&D intensity and natural
resource intensity
2000 to latest available year
Product and labour market regulation
indicators
Index scale of 0-6 from least to most restrictive
Educational attainment of managers and
workers
Bachelor degree and higher
Fiscal support for business R&D investment
2009
As a percentage of GDP
Tax subsidy rate on investment in R&D
2009, percentage
VC funding sources in Canada and the
United States
2011
Recommendations for enhancing innovation
 General framework conditions
• Open network industries (especially telecoms) and implement Ch. 7 (on
labour mobility) of the AIT
• Clarify FDI net benefit test and apply it narrowly
• Encourage entrepreneurship/risk taking/culture of commerce
 R&D support policies
•
Lower small CCPC rate toward large firm rate and reinstate capital costs in
eligible base; use SR&ED savings to boost direct grants
• Subject IRAP and other R&D support to rigorous cost/benefit analysis
• Carefully design VC support, e.g. as temporary co-financing arrangements
with private partners, giving them full management control
 Technology transfer
• Promote academic-business knowledge sharing
• Provide IP (patenting) support to small business
Tertiary education
Developing skills for innovation
and long-term growth
Unemployment rate by education level
Per cent
Productivity and university attainment
across provinces
Relative earnings of 25-64 year-olds with
tertiary education, 2009
Upper secondary and post-secondary non-tertiary education = 100
Earnings premium and employment rate
relative to high school graduates
Per cent
Employment of tertiary graduates by skill level
University graduates
1997
2007
Management or occupations usually requiring university
65.0%
60.8%
Occupations usually requiring college or apprenticeship
training
Occupations usually requiring high school
19.2%
20.2%
13.1%
15.4%
Occupations usually requiring on-the-job training
2.8%
3.6%
Management or occupations usually requiring university
22.1%
20.2%
Occupations usually requiring college or apprenticeship
training
Occupations usually requiring high school
43.9%
43.1%
26.2%
29.5%
Occupations usually requiring on-the-job training
7.8%
7.2%
College graduates
Population with tertiary education, 2009
Percentage of the population age group
Participation rates in university and college
By family income among 18 to 24 year-olds, per cent
Tertiary participation by parental education
Among 18 to 24 year-olds, per cent
Master’s and PhD graduation rates, 2009
Sum of graduation rates for single year of age
Note that the OECD’s use of the term ""graduation rate"" does not correspond to the concept of a graduation
rate used by provincial and territorial governments in Canada. OECD uses the term ""graduation rate"" to refer to
the number of graduates (of any age) as a share of the population at the typical age of graduation. This is how
the term is used in this report. This should not be confused with what OECD calls a ""completion rate"", and
what in Canada is more commonly referred to as a graduation rate, which reports on what percentage of a group
of students starting a program have completed it (or graduated) within a certain time frame.
Share of university graduates by field
2009
Science & engineering PhD graduates, 2009¹
As a percentage of all new degrees awarded at doctorate level
Average tuition fees in real terms by province
2008 CAD
University full-time tuition fees
2008/09, in equivalent USD converting using PPPs
Public subsidies for tertiary education
2008, percentage of total public expenditure on education
Funding for tertiary education
Expenditure on tertiary education institutions
2008, percentage of GDP
Class sizes in Canadian universities
Ratio of full-time students to full-time teaching staff
The global market in tertiary education, 2009
Number of foreign students enrolled in a given destination country
as a percentage of all students enrolled abroad
Recommendations to improve tertiary education
• Improve access by boosting need-based aid
(financed by reduced education tax credits) and
making the application process more transparent
• Provide more info to support education choices
• Use the tertiary system more to recruit migrants
• Consider greater differentiation across TEIs as
regards research versus teaching
Thank you for your attention!
For more information:
[email protected]
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