Finance Minister Jim Flaherty is urging Canada’s private sector to start investing the cash businesses received through corporate tax cuts and other federal incentives as the best way to create jobs and give the economy a boost.
Mr. Flaherty delivered the closing speech at a two-day conference of the Canadian Council of Chief Executives in Ottawa, where Canadian business leaders focused on how to reposition Canada’s economy toward growing Asia-Pacific markets.
In his speech, the finance minister acknowledged that Canada faces a “fundamental shift” in that it can no longer depend on the economies of the United States and Europe as it has in the past. He said expanding trade with Asia must be a priority for business and government.
“We have lowered taxes on income for businesses and individuals. We have encouraged the purchase of new technologies and equipment,” said Mr. Flaherty. “But ultimately, it is up to you in the private sector to take advantage of all these strengths and invest, to create jobs and grow our economy.”
The minister’s comments are in line with repeated statements by Bank of Canada Governor Mark Carney, who argues that large corporate cash holdings amount to “dead money” that should be put to productive use.
It is a message that has prompted some debate. A study by National Bank Financial recently disputed the theory, arguing that its analysis shows Canada’s publicly traded companies are in fact making investments and returning cash to shareholders.
Mr. Flaherty repeated his government’s desire to make expanded trade with Asia a priority and said he would be travelling to Asia next month to “strengthen Canada’s profile” and attend meetings of the International Monetary Fund, the World Bank and the G-7 in Tokyo.
Still, business experts say there is a lot more that Canadian governments and business could be doing to expand trade and investment with Asia.
Arvind Gupta, the CEO and Scientific Director of Mitacs, which provides scientific research and training programs, told a morning panel that Canada needs to encourage more science and math students and recruit more foreign students who want to live in Canada. Mr. Gupta said Canadian embassies continue to promote Canada as a tourist destination, rather than a place for higher education and skilled jobs.
Mr. Gupta said Canada needs to compete with big name U.S. universities who are actively seeking out potential foreign students and promoting student accomplishments in local newspapers abroad in order to build up brand knowledge.
“It’s guerrilla warfare,” he said.
