Canada’s next big economic pitch: to feed a hungry world
The search for ways to shore up Canada's struggling economy is an increasingly urgent exercise, as the oil sector continues to sputter, non-energy exports stall and the country's labour market shrinks.
Among the proposed drivers to spur economic growth is the agriculture and food-processing sector, an unlikely yet important powerhouse that employs one in eight Canadians. Canada is the fifth-largest agricultural exporter in the world, and the sector is undergoing a technological revolution, from the use of drones and satellites that monitor soil moisture and indicate optimum planting times to smart machinery and transportation networks to make and distribute food products.
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Canada's Dominic Barton, chair of the Canadian Minister of Finance's Advisory Council on Economic Growth, thinks that this kind of innovation in agriculture and food – combined with new free-trade agreements with hungry markets such as China – will help Canada find its next niche in the global economy.
The council's first recommendations in October dealt with setting up an infrastructure bank, increasing immigration levels by 50 per cent, and spurring foreign direct investment in Canada.
Mr. Barton, who is global managing partner of McKinsey & Co. in London, says the council is now working on its second, and likely final, wave of recommendations, focused on innovation, skills and particular growth sectors for Canada. He expects they will be released by the end of the year.
What are the major concerns about Canada's growth and productivity that you're trying to address?
What we're most worried about is the long term. If you look out 10 to 20 years, because of demographics and the aging population, we're one of the fastest-aging OECD countries on the planet. We will see our GDP growth rate literally halved, just because we'll have fewer workers in the market. We've enjoyed about a 3.1-per-cent growth rate in the past 50 years; we think that will literally be cut in half. The good news is that we've got a lot of things that we can do to unlock more growth. But if we sit back and do nothing, it would be a pretty ugly picture.
What can we unlock?
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There's a range of things we can do. One of the reasons we picked infrastructure is because it is one of the most powerful ways of improving GDP growth and inclusive growth rates. Innovation is another one, because with all of the changes going on in technology, in particular, but also in biotech, it's probably going to be the most rapid source of good service jobs. Canadian universities and researchers are world-class in invention, but we're not as good as we could be in scaling up those inventions into commercial companies. And then we have sectors where we have some inherent strengths and really good niches where we could get much more growth.
What are these sectors and niches?
We're picking one in particular, which is agriculture and food, because it can employ a lot of people, there's a lot of innovation technology around it and huge demand. Also Canada is well-positioned. In health care, we have one of the biggest, most comprehensive databases on health in the world, but we're not leveraging that to figure out what we could do to innovate health-care delivery. There's also natural resources and fintech. There's tourism, where there's 400 million Chinese tourist trips going on a year and we don't capture much of that share. And then there's free-trade agreements. We're very keen on free-trade agreements.