Advice for Mark Carney's Economic Growth Task Force

Post 59 | How to fix Canada

Canada is stuck in Groundhog Day as our economy circles the drain when measured by decreasing GDP, plummeting productivity, decreasing tax revenues, broad unaffordability and a national debt of $1.2 trillion that grows by $110 million each day! This while our walking dead government exhibits pathological self-interest and insists they just need to listen better and work harder and all will be well, despite the fact they are either responsible for or complicit in every major woe in our country.

Their arrogance and stubbornness have graduated from irritating, to maddening, to damaging, to contemptible, to despair-inducing - kinda like this…

But most of us don’t even need to read the economic numbers to know Canada is struggling badly. We can feel it, see it and practically smell the malaise. Choose your preferred metaphor - we are spinning our wheels, stuck in a rut, running on empty, out of gas, going nowhere fast…

But fear not because with all red lights flashing and a country desperate for an election and revised direction, Justin Trudeau has arrived at his latest stroke of genius to move us past the economic and fiscal conflagration he’s created…by appointing a task force to study the issue. Holy mackerel, why did we not we think of this earlier?

This despite the fact that economic analysis and recommendations from Conference Board of Canada, C.D. Howe Institute, Fraser Institute, Macdonald-Laurier Institute, Aristotle Foundation and myriad others are rife. As one example a multi-year, bi-partisan task force called The Coalition for a Better Future, co-chaired by the respected Lisa Raitt and Anne McClellan presented their October 2023 Report to the House of Commons Finance Committee, tracking 21 metrics along with corresponding growth recommendations.

Since that Coalition report dropped we’ve heard barely a peep, likely because it said inconvenient things that messed with Justin’s reality distortion field, like this, “…on a per capita basis, our economy has not only stalled but is contracting. Real GDP per capita has fallen four straight quarters, and we are producing less per person today than in 2018.” Further, “On labour productivity, the amount of output generated per hour worked looks even worse. That metric has fallen 11 of the last 12 quarters, and productivity numbers in the first half of this year are below what they were in the final six months of 2014. If things don’t change, we’ll soon be talking about a lost decade of productivity.”

Why not leverage some of their work to do smarter things for Canada rather than stay on the current failed economic path of neo-socialism, married with redistributive and grievance based economics?

I suppose that kind of information really harshes Justin’s mellow, and the required follow up requires so much darned work. How much easier to simply make another big announcement and seem he’s doing something, while buying another few quarters awaiting the resulting pronouncements.

To that end Trudeau has now appointed Mark Carney as his Economic Advisor to lead a task force on growth and productivity, so he can pretend it will deliver us from the past decade’s decline over which he’s presided and discover magical new ideas we had heretofore not pondered.

This task force of one – thus far just Mark – is apparently going to wander the country gathering feedback from undefined groups, then presumptively submit a report of findings and recommendations, though what and when are unknown. Since this is being done as a Liberal Party endeavour and not a government project (at least taxpayers aren’t directly on the hook for it) we can expect transparency to be even more gossamer-thin than usual.

It reeks of performance art once again as Justin Trudeau pretends to do something while having no clue how to grow, promote and manage an economy – one he was bequeathed in reasonable health nine long years ago.

Mark is a smart guy, of seeming good character, with an impressive resume and financial track record. So I’m willing to overlook the glaring conflict-of-interest wherein Brookfield Asset Management, the company he Chairs is simultaneously lobbying for $10 billion of federal government seed money for an ill-advised investment project that would manage up to $50 billion of public pension money. And to see beyond the poor optics of him just being tapped to play a key Liberal Party fundraising role. And even to temporarily forgive his recent years of overwrought ESG and carbon reduction advocacy.

I will extend him the benefit of the doubt and permit he has the good judgement to examine what is best for Canada, while considering the broader landscape and rustle up some ideas that don’t just bang on the green economy drum or fluff the Liberal plumage - or his own.

But sadly, I don’t expect he’ll be calling on the Pragmatic Canadian for a tete-a-tete session so I offer up here my unsolicited advice featuring a gathering of bullet point advice from past columns. Perhaps this feedback will help reduce the time it takes to produce the report and save our country from more damage by his new boss.

For regular readers some of this will be a review but it includes additional commentary, and assembling the recommendations all in one spot makes the trends more obvious.

By the way - if any of you know Mark, kindly share this with him.

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Unwinding Canada's Fiscal Mess Will Take Time and Sacrifice | Fixing our Finances is Like Fixing our Health is an essay that draws a parallel between the strategies we need to improve our plummeting collective health and our awful fiscal mess. It finishes off with four simple ideas that should be foundational for any government. Let’s call this our basic starting point.

• Balance the budget annually while slowly chipping away at debt, no matter how insurmountable it seems

• Focus on building innovation, entrepreneurial and production capacity so our economy has fuel for growth

• Stop wasting tens of billions on income redistribution to the unappeasable and insatiable and be candid about its limited effect and declining returns

• Stop sabotaging growth with excessive regulations and bureaucracy

Productivity Drowns in Regulations and Lack of GDP Targets | How to Improve Canada’s Productivity and Growth digs deeper into the role of over-regulation in crushing productivity, while proposing government actually sets GDP targets and holds themselves to account against them rather than simply reporting GDP after the fact as though it is out of their power to influence. It concludes with six pragmatic guiding principles for us to follow.

• Shift the government’s purpose to creating the conditions for growth, jobs and prosperity - not creating those things per se. It is not the federal government’s job to build houses, regulate grocery prices, create equity, or lay a heavy hand on the industry winners and losers for the future through mandates, regulations and corporate subsidies. No government is smart enough to create an economy of their own design - but should rightly celebrate if they are successful in enabling an environment in which a free market can thrive.

• Boldly set 5, 10 and 20 year GDP targets and state them publicly. Then make key investment and tax policy decisions with those as guides. Make GDP and productivity targets part of our national economic lexicon, changing the public dialogue to think about revenue production rather than always talking about spending.

• In addition to GDP, we need a handful of key growth/production targets to rally around - such as investments in Canadian R&D to produce unique IP, assets per worker, or SME exports - to name just a few potentials. They must be shared publicly and treated as foundational national investments. Government should work to these metrics as guiding stars when considering where to invest taxpayer money - then get out of the way and let the free market pick up.

• Make the ongoing reduction of regulations and red tape a central principle of government. Make hard cuts to the myriad processes that impede businesses and look even closer at every regulatory body. This may create a few holes that need patching and we need to accept that as a small price to pay. The capital, human resources and efficiency we’ll free up will have outsized benefits in comparison. Oh - and eliminate the Competition Bureau.

• Double down on our natural gas, mining and oil industries - in tone, infrastructure and investment. Export our natural gas to replace record high coal burning. And focus on mining and processing the raw metals needed for additive energy development by slashing regulatory impediments to greenlighting projects - before subsidizing tens of billions in foreign companies to make products that will rely on foreign raw materials.

• Stop competing with the United States in a corporate subsidy arms-race, driven by their outsized subsidy policies. It is a foolish and losing game.

The Folly of our Rush to Electrify Canada | Will Net Zero Make us go Dark? takes aim at the net zero topic, given Trudeau’s unrelenting focus on it during his tenure and its significant downward pressure on our economy. I believe we’ve cast away old rules, old industries and old technologies far too fast in a mad rush to presumptively save the world and our headlong jump into full electrification is one of those. To be briefly biblical, we know not what we are doing much of the time and often break more than we fix - economically, geopolitically and socially. And so, I offer these five key actions around the issue of energy - something near and dear to us Canadians, given that we could be the powerhouse of the world if only we stopped shooting off our own toes.

• Slow the ideologically driven death march to 2035 EV totality and let the market drive the pace of adoption

• Ensure we have in place an adequate, resilient and well tested infrastructure to handle the next fifty years of electricity demand

• Significantly deregulate and streamline the pathways for new energy projects - generation, transmission and distribution

• Prioritize nuclear to generate new load

• Reinvigorate our commitment to natural gas as feedstock for on demand load generation, while helping liberate the world of coal by selling them our clean fuel

Taken from What Canada Can Learn From Argentina | Free Market Capitalism over Collectivist Idealism, I offer you this excerpt from Argentinian President Javier Milei’s powerful speech to the WEF in January – you may have even been in the audience, Mark, being the well-connected fellow you are. The big theme is something I hope you can explain to Justin, who is entirely unaware that Socialism has failed everywhere throughout history. Moving away from his misguided mindset alone will help our economy immeasurably, without needing to chase any shiny new ideas.

• “We have come here today to invite the Western world to get back on the path to prosperity. Economic freedom, limited government and unlimited respect for private property are essential elements for economic growth. The impoverishment produced by collectivism is not a fantasy, nor is it an inescapable fate. It's a reality that we Argentines know very well.

  We have lived through this. We have been through this because, as I said earlier, ever since we decided to abandon the model of freedom that had made us rich, we have been caught up in a downward spiral - a spiral by which we are poorer and poorer, day by day.

  This is something we have lived through and we are here to warn you about what can happen if countries in the Western world, that became rich through the model of freedom, stay on this path of servitude.”

I realize that Wacko and Weird Battle for Normal | Pushing Back the Baseline may seem to be an article only about the terrible cultural policies of the past nine years. But you know that social and economic policies are intricately tied together and that the national zeitgeist has a big impact on our economic health, particularly when so grossly tamped down by the government. So bear with me on this list of what could be, in a day where we return to being a country of pragmatic and reasonable people and policies.

• There will be nothing weird about hiring on merit and dousing the fever of DEI

• There will be nothing weird about recognizing the biology of men and women and protecting the innocence and health of children, along with parental rights

• There will be nothing weird about repealing the online harms act, the online news act and the carbon tax

• There will be nothing weird about drastically reducing the bureaucracy and regulatory impediments that jam up everything from housing, to mining, to infrastructure, to energy development

• There will be nothing weird about focusing on biodiverse environmental health over the singularity of carbon reduction

• There will be nothing weird about promoting our natural gas and oil industry and eliminating the mandate on EVs

• There will be nothing weird about balancing our budget, paying down debt and slashing spending

• There will be nothing weird about a strong immigration policy that controls who, how many and for how long newcomers get to be in our country

• There will be nothing weird about respecting Provincial and Charter rights

• And there will be nothing weird about proudly promoting Canadian nationalism and unity without caveats, apologies or asterisks

Finally, I devoted an entire article to advice about Getting Back our Canada, including twelve ideas to help us regain our fiscal and national health. It’s best to read this article in full, so just click the link above.

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Hey, Mark, I’m going to leave it there for now as that’s a lot of reading for a busy guy. And I realize some elements were a bit repetitive, but that’s partly the point of this exercise - to impress upon you that the economic fixes our country needs are not always complicated or obscure and may not even require a guy with a big brain like yours. Sometimes, just banging away on pragmatic and sensible basics fixes a majority of ills.

I’ll admit to being very skeptical of this economic advisory thing, but am rooting for you nonetheless because I’m a Canada-first guy.

Allow me to leave you with one last bit of advice. If you have any sway whatsoever, tell Justin to call an election so we can see the last of him. That may be the biggest contributor to our economic health.

Drop me a line if you want more feedback.

Stay tuned and stay pragmatic.