Transcript Canada`s recent economic performance has been strong

OECD Forum on the Restated Jobs Strategy
Canada Country Report
Human Resources and Social Development Canada
OCTOBER 30-31
TOKYO, JAPAN
Canada’s recent economic performance has
been strong
The Canadian economy
continues to record solid growth
with strong macroeconomic
fundamentals …
Macroeconomic Performance (2005)
4
Canada
3
OECD Average
2
 GDP growth of 2.9% in 2004
and 2005
 Low levels of inflation
(currently 2.1%)
 Adjustments to dollar
appreciation and energy prices
 Surpluses in fiscal and external
current account balances
 Declining debt-to-GDP ratio
1
%0
-1
-2
Real GDP Growth
Labour Productivity
Surplus/deficit
balance
Trade account
balance
-3
-4
Source: OECD Employment Outlook (2006)
2
Canada’s labour market is delivering its
strongest performance in decades
 Robust employment growth
 Rising rates of participation and
employment
 Declining unemployment rates
 High rates of immigration
Labour Force Statistics
80
OECD
Canada
75
70
%65
60
55
50
1994
2005
Participation rate
1994
2005
Employment rate
Source: OECD Employment Outlook 2006
3
The labour market has responded well to
external pressures
The Canadian economy is highly
open to international trade and
capital flows …
Nominal Effective Exchange Rate
of Major Currencies
40%
Change betw een Jan 2003 and October
2006
35%
 Total trade represents a
relatively high proportion of
GDP – 72% in 2005.
30%
25%
20%
15%
10%
5%
0%
The Canadian dollar has risen more
than any other major currency since
the beginning of 2003.
-5%
-10%
Canadian
dollar
Euro
British
pound
Japanese
yen
Chinese
renminbi
US dollar
-15%
Source: Department of Finance Canada calculations
4
… and is considered to be flexible and resilient
Canada’s regulatory and institutional framework supports a flexible, dynamic
market …
 Canada has the third least restrictive employment protection legislation among
OECD countries (2003)
OECD: Employment Outlook (2006)
… and the workforce has the capacity to adjust to increasing skill requirements
 Nearly half (45%) of adults hold a post-secondary qualification – more than in any
other OECD country
 Canada ranks 6th in university completion among OECD countries (22% of adults)
OECD: Education at a Glance (2006)
5
But a number of factors pose challenges for
creating jobs and ensuring growth …
Population aging
Globalization
Global economic
uncertainty
Rising world demand
for natural resources
Knowledge based economy
6
… and there is unevenness in the national
labour market
Labour participation rates for some groups are well below the national
average
Participation Rates
80%
77.8%
75%
70%
67.1%
64.8%
65%
62.5%
60%
57.9%
55%
50%
46.4%
45%
40%
Canada (15-64) **
* 2001 Census
** 2005 Labour Force
Survey
Immigrants < 5 years
(15-64)*
Aboriginal people
(15-64)*
Less than High
School Comp. (2564)**
Older w orkers
(55-64)**
People w ith
disabilities (15-64)*
As well, structural adjustments have lead to disparities in regional labour
market performance
7
Change in emphasis in 2006 Jobs Strategy
versus 1994 Jobs Strategy

The 1994 Jobs Strategy aimed at reducing high and persistent
unemployment.

Ten years later, the re-stated Strategy places emphasis on:
A.
B.
C.
D.
Appropriate macroeconomic policy
Removing barriers to labour market participation
Tackling labour and product market obstacles to labour demand
Facilitating development of labour force skills and competencies
8
Current Government of Canada Directions

The Canadian government is committed to make federal spending
more transparent, accountable and disciplined, while creating greater
opportunity for Canadians, investing in our families and communities,
and making our streets safer and our borders more secure.
Budget Speech, May 2006
•
… the Government will be bringing forward fiscally responsible
budgets and a legislative program that will achieve the results that
Canadians expect.
Speech from the Throne, April 2006
9
Pillar A: Set appropriate macroeconomic policy
 Monetary policy should aim at price stability and sustainable
public finances
 Macroeconomic policy should be used to help stabilise the
economy
10
Pillar B: Remove barriers to labour market
participation
 Implement well-designed unemployment benefit systems and
active labour market policies
 Make other non-employment benefits more work-oriented
 Facilitate family-friendly arrangements
 Adjust taxes and other transfer programmes to make work pay
11
Pillar C: Tackle labour and product market
obstacles to labour demand
 Ensure that wages and labour costs respond to labour market
developments
 Enhance competition in product markets
 Facilitate the adoption of flexible working-time arrangements
 Ensure employment legislation helps labour market dynamism
and provides security to workers
 Promote transitions to formal employment
12
Pillar D: Facilitate development of labour force
skills and competencies
 Promote high-quality initial education and set conditions to
improve labour force skills
 Facilitate school-to-work transitions
13