{"id":7549,"date":"2021-02-18T22:19:35","date_gmt":"2021-02-18T22:19:35","guid":{"rendered":"https:\/\/www.pantheregroup.com\/2021\/02\/18\/business-leaders-are-worried-politicians-arent-paying-enough-attention-to-the-long-haul\/"},"modified":"2021-02-18T22:19:35","modified_gmt":"2021-02-18T22:19:35","slug":"business-leaders-are-worried-politicians-arent-paying-enough-attention-to-the-long-haul","status":"publish","type":"post","link":"https:\/\/www.pantheregroup.com\/2021\/02\/18\/business-leaders-are-worried-politicians-arent-paying-enough-attention-to-the-long-haul\/","title":{"rendered":"Business leaders are worried politicians aren&#8217;t paying enough attention to the long haul"},"content":{"rendered":"<div style=\"text-align:center\"><\/div><p> \n<\/p>\n<div id=\"\">\n<header aria-label=\"Beginning of Article\" class=\"article-header\">\n<nav aria-label=\"Breadcrumb\" class=\"breadcrumbs\">\n<h2 class=\"visually-hidden\">Breadcrumb Trail Links<\/h2>\n<ol class=\"breadcrumbs__items list-unstyled\">\n<li class=\"breadcrumbs__item\"> News <\/li>\n<li class=\"breadcrumbs__item\"> Economy <\/li>\n<\/ol>\n<\/nav>\n<p class=\"article-subtitle\"> Kevin Carmichael: It&#8217;s the quality of government spending that matters now, not the quantity <\/p>\n<div class=\"article-meta\">\n<div class=\"published-by\">\n<p>Author of the article:<\/p>\n<p> <span class=\"published-by__author\">Kevin Carmichael<\/span> <\/div>\n<div class=\"published-date\">\n<p>Publishing date:<\/p>\n<p> <span class=\"published-date__since\">Feb 18, 2021<\/span> \u00a0\u2022\u00a0 <span class=\"updated-date__since\">10\u00a0hours ago<\/span> \u00a0\u2022\u00a0 <span class=\"published-date__word-count\">5 minute read<\/span> <\/div><\/div>\n<figure class=\"featured-image\"><picture class=\"featured-image__ratio featured-image-category__economy\"><\/picture><figcaption class=\"featured-image__caption image-caption\"><span class=\"caption\">Finance Minister Chrystia Freeland.<\/span> <span class=\"credit\">Photo by David Kawai\/Bloomberg files<\/span> <\/figcaption><\/figure>\n<\/header>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>Speaking at a virtual conference on the state of the economy, Penny Wise, president of 3M Co.\u2019s Canadian unit, hadn\u2019t been given an opportunity to state what keeps her up at night, so she used her last few minutes to share her worries about where the economy is headed.<\/p>\n<p>\u201cWe really need to think about how to position ourselves for the future, and not let the future come to us,\u201d she said at the event organized by the Canadian Chamber of Commerce on Feb. 17.<\/p>\n<p>Everyone knows the pandemic represents the gravest threat Canada has faced since the Second World War. But by obsessing daily over the country\u2019s place in the vaccination league tables at the expense of everything else, we risk forgetting that we\u2019re also in the midst of an economic reordering that is comparable to the Industrial Revolution or the mass adoption of personal computers.<\/p>\n<p>If we ride that wave successfully, we\u2019ll be set. If we don\u2019t, we\u2019ll be one of those nations that muddles along, weighed down by debt that we can barely afford.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section class=\"ad\">\n<h2 class=\"visually-hidden\">Advertisement<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-1\">\n<div class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>\u201cYou need to manage the short term, but you need a plan for the long term for all the stakeholders to be able to move forward,\u201d said Monique Leroux, a strategic adviser at Fiera Capital Corp., a Montreal-based wealth management firm that oversees assets worth about $180 billion, who also spoke at the conference.<\/p>\n<p data-async=\"\">Wise and Leroux weren\u2019t a tag team. Leroux spoke in the morning and Wise was on a panel in the afternoon. Taken together, though, their comments reflect a sense of trepidation about what Prime Minister Justin Trudeau will do with the $100 billion he said he is prepared to spend on \u201cstimulus\u201d that \u201cwill help us grow out of this recession towards an economy that is greener, more innovative, more inclusive and more competitive.\u201d<\/p>\n<p>Trudeau has the right idea. We\u2019re more talkers than doers when it comes to climate change, so it\u2019s past time to get serious. Years of underinvestment mean the economy is only capable of growing at an annual rate of about 1.5 per cent before it starts to overheat, according to the Bank of Canada, which is way too slow to support the quality of life to which we\u2019ve become accustomed. We\u2019ve relied on periodic oil-price booms to make up for a complacent attitude about global competitiveness for decades. The shift to a carbon-light economy means that\u2019s no longer viable.<\/p>\n<p data-async=\"\">\u201cStructural challenges that existed prior to the pandemic remain,\u201d International Monetary Fund economists said this week after their annual review of the Canadian economy. \u201cCanada still needs to boost its productivity, support productivity-enhancing investments, and diversify beyond traditional sectors, including oil.\u201d<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section class=\"ad\">\n<h2 class=\"visually-hidden\">Advertisement<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-2\">\n<div class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<blockquote>\n<p>Canada still needs to boost its productivity, support productivity-enhancing investments, and diversify beyond traditional sectors, including oil<\/p>\n<p>IMF<\/p>\n<\/blockquote>\n<p>It was a crucial observation, but the IMF line that got the most attention was its contention that Trudeau\u2019s plan to spend four per cent of gross domestic product over three years \u201cneeds further justification,\u201d since additional spending beyond what\u2019s already been deployed \u201ccould weaken the credibility of the fiscal framework.\u201d<\/p>\n<p>The fund\u2019s assessment wasn\u2019t a surprise: Trudeau\u2019s stated intentions in the fall economic statement didn\u2019t include anything specific about how that money would be spent, or why it was needed. Still, it probably stung a little, as Canada tends to be at the front of the class when it comes to the IMF\u2019s centrist teachings.<\/p>\n<p>The fund praised Canadian authorities for taking \u201ctimely, decisive, and well-coordinated policy actions\u201d in response to the pandemic, and it raised Canada\u2019s economic outlook this year to growth of 4.4 per cent. But it wasn\u2019t willing to endorse a second massive spending program on faith alone. It scolded the Trudeau government for its stubborn refusal to set out clear spending limits, while at the same time warning that a \u201clack of information\u201d about the \u201cspecific conditions\u201d that would cause the feds to taper emergency spending \u201ccould add to uncertainty.\u201d<\/p>\n<p>There\u2019s a message for Trudeau and Finance Minister Chrystia Freeland in all of this: their government lacks the credibility necessary for the global business community, and the wise men and women who advise it, to give it carte blanche.<\/p>\n<\/section>\n<div class=\"ad__section-border article-content__ad-group\">\n<section class=\"ad\">\n<h2 class=\"visually-hidden\">Advertisement<\/h2>\n<div class=\"ad__container\">\n<div class=\"ad__inner\" id=\"ad__inner-3\">\n<div class=\"ad__placeholder\">\n<p> This advertisement has not loaded yet, but your article continues below. <\/p>\n<\/p><\/div><\/div><\/div>\n<\/section>\n<\/div>\n<section class=\"article-content__content-group\">\n<h2 class=\"visually-hidden\">Article content<\/h2>\n<p>The IMF report was followed a day later by the release of the latest from an ad hoc tax-and-spend advisory group of retired policy-makers and economists assembled by the C.D. Howe Institute, a Toronto-based think-tank.<\/p>\n<p data-async=\"\">\u201cOverall, the group,\u201d led by John Manley, a former federal finance minister, and Janice MacKinnon, a former Saskatchewan finance minister, \u201cis not convinced that a large post-pandemic stimulus package is appropriate,\u201d it said in minutes of a meeting held on Jan. 29. \u201cMembers argued that any further debt-financed stimulus should be temporary, essential, and targeted to improving the economy\u2019s economic capacity.\u201d<\/p>\n<section aria-labelledby=\"moreTopicLabel\" class=\"more-topic\"><button aria-hidden=\"true\" class=\"more-topic__button-prev\" tabindex=\"-1\" title=\"previous\" type=\"button\"\/><button aria-hidden=\"true\" class=\"more-topic__button-next\" tabindex=\"-1\" title=\"next\" type=\"button\"\/><\/section>\n<p data-async=\"\">Canada is nearing a limit to the amount of debt it can safely carry. The Conference Board of Canada on Feb. 18 published a report that estimates that all the emergency spending means the combined net debt of the federal, provincial and territorial governments will be about 100 per cent of gross domestic product, the highest since the early 1990s.<\/p>\n<p data-async=\"\">All that debt needn\u2019t be a reason to retreat. But it does mean there is little room for spending that doesn\u2019t expand the economy\u2019s ability to generate wealth. Executing will require more focus and discipline than the House Finance Committee showed this week in its pre-budget report, which includes 145 recommendations.<\/p>\n<p>Freeland might focus instead on two themes: subsidized child care and digital connectivity with an emphasis on rural broadband. Doing each right would be expensive, but both would pay for themselves by enabling more people to participate in the economy, which would increase the economy\u2019s ability to generate growth.<\/p>\n<p>There will be other ideas. The point is that it\u2019s the quality of the spending that matters now, not the quantity.<\/p>\n<p><em>Financial Post<\/em><\/p>\n<p data-async=\"\"><em>\u2022 Email: kcarmichael@postmedia.com | Twitter: <a class=\"twitter-follow-button\" data-evt=\"click\" data-evt-typ=\"User Interaction Click\" data-evt-val=\"{\" click=\"\" source=\"\" type=\"\" link=\"\" name=\"\" layout=\"\" element=\"\" null=\"\" feed=\"\" list=\"\" id=\"\" target=\"\" url=\"\" title=\"\" story=\"\" position=\"\" vertical=\"\" pixels=\"\" href=\"https:\/\/twitter.com\/carmichaelkevin\" rel=\"noopener nofollow\">CarmichaelKevin<\/a><\/em><\/p>\n<\/section>\n<section class=\"article-content__share-group article-delimiter\" data-evt=\"beforeunload\" data-evt-typ=\"scroll-depth\" data-evt-val=\"{\" control_fields=\"\" of=\"\" page=\"\" viewed=\"\" story=\"\">\n<h2 class=\"visually-hidden\">Share this article in your social network<\/h2>\n<\/section>\n<div class=\"widget article-content__widget-group article-content__widget-group--slot1\">\n<section aria-labelledby=\"TheLogic1582551515386276812471647349152340\" class=\"feed-section feed-section--partner-story list-widget--partner-story the-logic\" data-async=\"\">\n<div class=\"widget-title widget-title--partner-story flex-align-center row row--no-padding--left row--no-padding--right\">\n<p> In-depth reporting on the innovation economy from The Logic, brought to you in partnership with the Financial Post. <\/p>\n<\/p><\/div>\n<\/section>\n<\/div>\n<div class=\"widget article-content__widget-group article-content__widget-group--slot2\">\n<section aria-labelledby=\"TopStoriesNewsletter3450180125725565139821314237912109\" class=\"newsletter-widget\" data-account-id=\"b9d3df2fccd108b5eff3c44f573b2cd6\" data-target-list=\"FP_HeadlineNews\" data-widget=\"newsletter\">\n<div class=\"newsletter-widget__body\">\n<h2 id=\"TopStoriesNewsletter3450180125725565139821314237912109\">Top Stories Newsletter<\/h2>\n<p class=\"newsletter-widget__text\">Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.<\/p>\n<div aria-hidden=\"false\" class=\"newsletter-widget__bottom js-form-main\">  <small> By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. 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