This article originally appeared in the Financial Post. Below is an excerpt from the article.
By
After more than a decade of dismal GDP and productivity growth it’s easy to despair about Canada’s capacity to revive its economy. The good news is that our 10-year slump is largely due to policy, and policy can be reversed. We can stop emphasizing redistribution over income growth, consumption over investment, labour over capital, and regulation over market forces.
Canada was in a similar situation of chronic slow growth between 1981 and 1992 but snapped out of it by adopting well-designed policies, based on time-tested economic principles, that strengthened business investment and productivity.
Between 1992 and 2007, Canada substantially boosted GDP and labour productivity. Real GDP per capita accelerated from annual average growth of 0.9 per cent from 1981-92 to 2.6 per cent from 1992-2007 — before slumping again to just 0.3 per cent after 2007. This period of faster growth is reflected in the camel’s hump in the middle of the nearby graph of per capita GDP growth.
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Philip Cross is a senior fellow at the Macdonald-Laurier Institute.
