Companies still hiring in-demand positions signals a healthy fall labour market: Robert Half regional VP
TORONTO -- Canada's economy was headed for slowing growth in the next decade even if COVID-19 had never hit, according to a new report by Deloitte Canada.
The report, which looks at more than 1,000 variables to predict how Canada's economy will look in 2030, suggests that the country will need more workers -- with greater productivity -- to get the economy chugging at a fast enough pace to pay for climate change initiatives and government investments without raising taxes.
"We believe Canada is the best place in the world to live and work and do industry. If we continue on our current path, that is compromised or in jeopardy," said Deloitte Canada chief executive Anthony Viel.
The consulting and audit firm's report comes as the government is laying out ambitious plans to spur the economy forward after the COVID-19 pandemic -- and ensuing lockdown -- left a record number of Canadians jobless. Last week's speech from the throne suggested that the government will look toward clean energy investments, as well as disability and jobless supports, in its recovery plan.
Deloitte Canada did not directly address the throne speech in its report. But the firm predicts even a complete return to pre-pandemic "normal" would cause economic growth to slow to 1.7 per cent per year in the next decade. That's below the past decade's average of 2.2 per cent growth -- which was already lower than the 3.2 per cent growth in the decade leading to the 2008 and 2009 recession.
Amid a low fertility rate -- at a time when the share of Canadians over age 65 is expected to nearly double -- Canada needs to be more inclusive of groups that are underemployed in the economy, the report found. Getting marginalized groups better integrated in the workforce can grow the tax base and help the government avoid raising tax rates, said Georgina Black, Deloitte Canada's managing partner of government and public services.
Deloitte's forecast suggests that the country could replace its retiring workforce by improving employment options for 88,500 women; 377,300 Canadians over age 65; 700,000 immigrants; 517,657 people with disabilities; and between 38,000 and 59,000 Indigenous Canadians.
The theory, Deloitte's report said, is that boosting the number of hours worked in the economy would lift the pace of yearly economic growth by 50 per cent, adding $4,900 to Canadians' average annual income by 2030, Deloitte estimated.
For instance, Deloitte cited a survey suggesting that more than 600,000 Canadians with disabilities said they would look for work if minor workplace barriers were removed.
"Many of these inequalities have worsened during the pandemic, with women and under-represented groups far more likely to become unemployed than men or non-racialized groups," the report said.
Deloitte suggests companies need better disability accommodations and workplace inclusion policies, and should add childcare as a benefit package, noting that during COVID-19, women's workforce participation dipped to 55 per cent for the first time since the mid-1980s as childcare options dwindled.
In Deloitte's ideal recovery scenario, schools would offer better apprenticeship options and retraining programs for older workers in shrinking industries, and governments would invest in rural internet infrastructure and childcare for working parents. Regulators would step in under Deloitte's plan and allow skilled immigrants to use their foreign credentials and degrees. Canada loses as much as $50 billion each year that could be contributed by underemployed immigrants, the firm said.
Despite requiring the government to spend money and set incentives for employers, Deloitte claims that its proposal would boost government revenues by nine per cent without raising taxes.
"More workers and more incomes means more taxes and more investment," said Viel.
Canadian businesses also need to invest more in technology and late-stage startups, and Deloitte suggested investments should be focused on a few high-growth industries where Canada can be a leader, such as construction, medical equipment and computer system design.
"Government and business (need to) create the conditions where companies want to invest here and not in another country, " said Black.