Canadians have always been great builders. The Canadian Pacific Railway united the country with thousands of kilometers of track across forest, mountains and prairies. In the St. Lawrence seaway, we built the longest deep-draft navigation system in the world, which became the arteries for trade and commerce in North America. Today we take these engineering marvels for granted, forgetting that at the time they were controversial and required tough decisions.
Today, we are a nation of builders that can't get anything built. Pipelines, electricity transmission, roads, ports: investment in essential economic and trade infrastructure suffer roadblock and delay.
There's an urgent need to get Canadians to pick up their shovels. Canada, along with the rest of the global economy, is stuck in a low growth trap. The Bank of Canada expects Canadian GDP to grow a paltry 1.3 per cent this year. This is simply not enough to achieve the job growth, the pension returns, and the tax revenues Canadians depend on to sustain our prosperity.
Getting out of this trap will be a challenge. Our population is aging: 2017 will be the year our labour force will start to shrink. We're a trade-dependent nation facing a weak global economy and a worldwide backlash against globalization. Most insidious of all is our lagging productivity. Labour productivity improvements driven by innovation are the best way to grow an economy because it's the only way to increase wages sustainably. Last year, instead of growing, Canada's productivity fell by 0.2 per cent.
Canada's trade infrastructure is falling behind at precisely the wrong time.
Ottawa's most important policy response to lagging growth has been a return to that great theme of Canadian history: building. Between the commitments of the last government and the promises of the new one, $125 billion dollars will be invested in infrastructure over the next ten years.
The OECD's research points to investment in infrastructure with high multipliers, such as transportation and energy, as the best way for rich countries to avoid the low growth trap we're setting for ourselves. This June, the Canadian Chamber released The Infrastructure that Matters Most, a report that outlines our case for why the government needs to put more emphasis on trade-enabling infrastructure.
Sixty per cent of Canada's GDP depends on trade. Canadians need to build now to get our goods and services to the growing global middle class, projected to grow from 1.8 billion today to five billion by 2030. We need to prepare for the next upswing in commodity prices. Our ability to compete in many sectors of the economy will depend on getting our goods to market as cheaply and as quickly as possible.
Canada's trade infrastructure is falling behind at precisely the wrong time. In 2008-2009, the World Economic Forum's Competitiveness Index ranked the overall quality of Canada's transport infrastructure as the tenth best in the world. Today we're number twenty-three. In that same index, the quality of our roads slipped from fourteenth to twenty-sixth place, a scary thought when you consider that half of Canada's exports travel by truck. We're losing ground on ports and rail as well.
We just cannot afford to fritter money away on nice-to-haves when our list of must-haves is so long.
This is a sprawling and complicated country that does best when we connect with each other and with the world.
The government is heading in the right direction. But as it stands, their infrastructure plan is not enough to boost growth today or set us up for prosperity tomorrow. We need to make some additions.
First, take a lesson from the grand projects of Canada's past. The government should make nation-building investments in trade infrastructure an equal priority alongside social, environmental and transit infrastructure in phase two of the Federal Infrastructure Plan. At all costs,government should focus funds on the projects that will result in the biggest economic boost, and avoid squandering limited resources by spreading them like peanut butter across the country.
Second, government should recognize that it cannot do this alone. Every dollar Ottawa spends on infrastructure is borrowed. Fortunately, there is a queue of shovel-ready, private sector investment that can get Canadians building again quickly and which doesn't require a single dime of taxpayer funding. Getting pipeline projects like Energy East and Trans Mountain approved through a rigorous but expeditious regulatory process is a good place to start.
Canada truly is a nation of builders. This is a sprawling and complicated country that does best when we connect with each other and with the world. Less than one year ago, Canadians gave a powerful mandate to a government that offered the exact opposite of the inward-looking and wall-building politics that is taking root in too much of the world today. The question is how the government will act.
Now more than ever, Canada needs the visionaries and nation-builders that will create prosperity by connecting Canada firmly to the trade routes of the twenty-first century.
This op-ed is based on a speech delivered on August 24 at the Canadian Energy Executive Association Business Forum.
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