Canada – Despite gloomy pronouncements from some analysts, Canada’s aging population does not guarantee an era of slow economic growth, finds a new study released by non-partisan Canadian public policy think-tank the Fraser Institute.
Despite Canada’s population getting older, the right government policies will help spur economic growth despite its millions of aging baby boomers, says Statistics Canada former chief economic analyst Philip Cross.
For example, governments in Canada could remove regulatory barriers and create a more conducive environment for innovation.
Governments could also open up industries, such as telecommunications, for example, to more competition.
On the employment front, Canada’s adult unemployment rate (5.8%) remains at historically low levels. With this low rate, rather than increasing or extending unemployment insurance benefits, governments could encourage the unemployed to move to jurisdictions with lower unemployment.
Among provinces, Ontario’s plan to raise taxes and introduce a provincial pension plan has damaged its investment climate. And both Ontario and Quebec remain heavily in debt.
In the US, policy uncertainty, including President Barack Obama administration’s dithering on the Keystone pipeline, creates uncertainty in Canada. But as the US. economy improves, Canada should benefit.
“Thanks to Canada’s stable financial sector and labour markets, it’s well-positioned to take advantage of an upturn in the US economy. An improving economy south of the border will also help Canada overcome slumping commodity prices,” Cross says.
Canada’s economic engine, its mining industry, contributed $54-billion to the country’s GDP and the value of mineral production was nearly $43.6-billion in 2013, reports the Mining Association of Canada.
Canada is also ranked in the top-five countries in terms of its global mineral production and is first in potash, second in uranium and cobalt, third in aluminum and tungsten, fourth in platinum group metals, sulphur and titanium and fifth in nickel and diamonds.
“Canada’s aging population, combined with the lingering effects of the 2008 recession, has made some economic analysts unduly pessimistic about economic growth. But pro-growth policies work in any economic environment,” he concludes.