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To a Canada Contact Lunch at the World Economic Forum
January 29, 1999
Davos, Switzerland
I am delighted to be here in Davos to talk about the economic experiences of Canada and, even more important, the opportunities that lie ahead. This has been my first attendance at this renowned annual conference, and in a way I am glad I did not come sooner.
Because thanks to the hard work of Canadians over the last five years, we have been busy turning around the Canadian economy, from what the Wall Street Journal compared to a third world economy in 1994, to what the Financial Times in London referred to a few months ago as "the top dog of the G-7".
A good measure of how far we have come is the theme you have chosen for this session. It is not "how does Canada plan to restore its economic vitality?"– as it would have been a few short years ago – but "will the economic renaissance continue?"
Not long ago, questions about our underlying economic health were a source of great anxiety for business and government in Canada and – far more importantly – a source of deep and abiding worry for our people. Year after year, forums such as this questioned our national resolve and ability to remain a player in the global, knowledge economy.
Those days are over. For good.
In fact, as someone who is known for his direct style, I have one word for your question "will the economic renaissance continue?" The answer is YES!
The Canadian people do not want to turn the clock back to the old ways and old problems. They want our country to continue charting a course that will see Canadians enjoying more opportunity, a higher standard of living and an even better quality of life in the new century.
The details of the remarkable economic comeback that Canada has made in five short years are, by now, well known to the world:
We enjoy the best fiscal health in the G-7. In our last two fiscal years, we balanced our books for the first time in almost thirty years – this after inheriting a $42 billion deficit when we took office.
And in our last budget we began to pay down our public debt. A process that will continue with our next budget in a few weeks. In fact, the Government of Canada has not borrowed new money on the markets for more than two-and-a-half years.
After decades of rising steadily, we have begun to lower taxes. And this will also continue.
Our inflation rate is at its lowest level since the 1960s.
Our interest rates are also at their lowest level in three decades.
Unemployment in Canada has fallen by almost three and a half percent since we took office – to its lowest level in nearly a decade. Last year our rate of job growth was number one in the G-7.
Since 1994, we have jumped from number 20 on the World Economic Forum ranking of competitiveness to number 5.
Even with the recent global turmoil, the International Monetary Fund recently forecast that Canada will be among the G-7 leaders for economic, employment and business investment growth in 1999.
In short, ladies and gentlemen, Canada has reclaimed its place in the front rank of world economies.
Once again, we are one of the best places in the world to invest and do business. Once again we have the resources and the confidence to make the most of our impressive advantages. Advantages that are a magnet for investors: skilled workers, a vibrant high-tech sector, great transportation links, a fast lane on the information highway, low energy costs, and affordable, quality health care.
Recent events also indicate that – as a people – we are gaining the confidence to move beyond old political conflicts. Canadians on the whole now agree that they want their leaders to focus on improving the standard of living and not on tired jurisdiction battles between levels of government. They want cooperation not conflict.
Canada is a country open to the world. We have just taken up our seat on the UN Security Council for the next two years. We are active in peacekeeping and observer missions. We have taken a lead in addressing international financial issues.
And, as we move towards new trade negotiations, we are committed to keeping our markets open. Forty percent of our GDP depends on exports. The highest of any major industrialized nation. So, we know that promoting an open trade and investment system in our region and around the world is the main guarantee of global and Canadian prosperity in the new century. That is why Canada has been at the forefront of efforts to increase liberalized trade in the Americas, in the Pacific and, through organizations like the World Trade Organization, around the world.
So ladies and gentlemen, we in Canada feel tremendous pride at the strides we have taken in recent years. But we cannot be complacent. If there is one lesson that we have learned, both through our own experiences, and those of other nations, it is that in the global economy, prosperity cannot be taken for granted. It has to be earned, day by day, year by year.
Like other G-7 countries, Canada experienced a slowdown in productivity growth in the last three decades. That is why we have been working hard to achieve the same kind of turnaround in our productivity performance as we have in our fiscal health. Because we know that improved productivity is the key to greater prosperity. And greater prosperity – a greater shared prosperity - is the key to a higher quality of life for Canadians.
It means investing in the right areas. In cutting – edge research and development through organizations like the Canada Foundation for Innovation and our Centres of Excellence. Investing in the skills and success of our people by expanding educational opportunities, modernizing our health care system and reducing child poverty. And it means cutting taxes and reducing the public debt burden.
The positive impact of this approach is already being seen. Our productivity performance in 1997 was the best in a decade. The commodity share of Canada's exports fell from around 60 per cent in 1980 to around 35 per cent in 1997, representing only about 12 per cent of our GDP.
And the high tech sector in Canada has posted a level of growth in jobs and output this decade that is twice the rate of the rest of the economy. A host of new, high-technology companies have taken off in the last several years – companies that produce cutting edge products like the space arm for the new International Space Station, or computer graphics for movies like Jurassic Park.
This is very good news.
But I feel especially good about our prospects because of the transformations that are sweeping our communities. Big and small. Rural and urban. From coast to coast.
Kanata, Ontario, a suburb of our national capital is emerging as the high-tech capital of Canada. Home to over 120 firms. Indeed, it is known throughout the world as Silicon Valley North. Saint John, New Brunswick, has found a new niche as a call centre. Hamilton, Ontario, known as Canada's "steeltown," now derives a greater share of its income from education than from steel. Montreal is a world centre for aerospace with Bombardier recently becoming the third largest maker of aircraft in the world. Saskatoon, Saskatchewan, is a thriving centre for biotechnology.
We in Canada know well the challenge of geography. Much of our national story has been about conquering time and distance. To bring Canadians closer together to create a real sense of national community. That is why we are embracing the potential of the information highway as few other countries. We have made it our aim to ensure that every lane on the information highway leads to Canada. To make sure that our communities and businesses are the most connected in the world.
In fact our government has set the ambitious goal of making Canada the most connected country in the world by the year 2000, by means of a strategy we call Connecting Canadians.
And it is built on an excellent base:
Canada is Number 1 in the G-7 in home computer, cable and telephone penetration.
We have the lowest telephone rates in the G-7.
The lowest internet access costs in the G-7.
The lowest costs of doing Information Technology business in the G-7.
The lowest software production costs in North America.
And the WEF ranks us number 1 in the world in producing knowledge workers.
This year, we will complete our SchoolNet program, connecting every one of our 16,000 schools and public libraries to the Internet. Making us the first G-7 country to accomplish this goal. In fact, we are already exporting this expertise to other countries.
By next year, we will have public Internet connections in 10,000 rural and urban sites. And we will soon have the fastest research network in the world: C*A*NET3, over 1,000 times faster than the current research network.
We are also working to make Canada the best place in the world for electronic commerce. That is why we hosted the OECD conference on E-com last fall. And that is why we are working to set the international standard for E-com trust, confidence and reliability. Because all countries that get on board early with E-com will accrue the benefits. But the countries that lead the way, that break new ground, that set the e-com standard, will win the biggest rewards. And Canada will be one of those countries.
All these investments are essential in our drive to increase productivity and prosperity for Canadians. But no investments are more important than our investments in people.
Starting next fall, the Millennium Scholarships will help an additional 100,000 young people a year get a post-secondary education. This was, appropriately, our very first post-deficit investment.
The new National Child Benefit is helping young children born into poor families, and helping those families move from poverty and dependence to building better lives for themselves and contributing to our national wealth.
And our national health care system will receive new investment and priority in our upcoming budget.
Our health care system is already a huge comparative advantage for Canada – and for doing business in Canada. The cost is shared across society. And that means that companies in Canada enjoy a huge savings – and advantage – over other markets, particularly in the United States. In fact, in the U.S., auto makers spend more on health premiums for their employees than on the steel that goes into their vehicles. In Canada that is a cost they do not have. And our system is more cost-effective, with far less administrative waste, and is universal, unlike the American system, which leaves tens of millions of people without coverage.
Investments like these, in the brains and health of our people are every bit as important in creating conditions for sustained prosperity as incentives for business investment. And we will continue to make the well-being and know-how of Canadians a major priority.
In fact our greatest asset of all is our people. The most diverse, and cosmopolitan population in the world – with roots and active links in every corner of the globe. A population that has built an unsurpassed quality of life. Leading the United Nations to declare Canada the best country in the world in which to live – five years in a row!
In a very practical sense, our well-educated, well-trained work force has no equal in North America.
Ladies and gentlemen, our presence here – and the presence of my Minister of Trade and Minister of Industry – is testimony to how eager we are to promote the impressive success story of today's Canada.
And with our sustained national effort, I have every confidence that Canada's renaissance will go on and on.
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