We Can Keep Pondering How To Fix Canada’s Productivity Gap, Or We Can Start Taking Trade With Africa And The Caribbean Community Seriously.
Imagine, if you will. Canada, a nation synonymous with innovation, abundant natural resources, and an educated workforce, finding itself at an economic crossroads. While Canadians can boast a high standard of living, our productivity levels – output per working hour – have been lagging. That’s no good since that sluggishness translates into less tax revenue for vital services like our national defence, critical infrastructure, healthcare for our aging population or education for the next generation.
Data (and general observation) paints a concerning picture. According to Desjardins, Canada's labour productivity has steadily declined since the 1960s, reaching a mere 1% in recent years. Scotia Bank echoes this concern, highlighting that Canada's GDP growth has consistently trailed the G7 average. This is not sustainable, especially as Canada accepts record numbers of immigrants to mitigate the effects of an ageing populace. To reignite our economic engine, similar to the conclusions we reached in the face of growing US protectionism and Chinese hostility, we must identify new avenues for growth.
Enter Africa and CARICOM: Two Palaces of Potential
Africa and CARICOM pulsate with economic dynamism. The Caribbean Development Bank forecasts that CARICOM economies will expand by an average of 8.6% this year, outpacing the global average. In the land of Ham, The African Development Bank paints a similarly promising picture, predicting continental growth at 4% on average this year in comparison to 0.9% for Canada. These regions brim with young populations, developing middle classes, and rich natural resources – all factors that spell opportunity for Canadian businesses seeking to expand.
Canada's trade landscape is heavily tilted towards the United States. While that relationship remains crucial, overdependence presents risks, particularly in the Age of Trump and ongoing protectionist stances meant to placate domestic voters. Further diversifying our trade partnerships is prudent, and Africa and CARICOM offer the means to get it done.
Canadian companies would gain access to fast-growing markets, while African and CARICOM nations benefit from Canadian expertise in technology including green technology, infrastructure development, and governance. There could be substantial economic benefits on both sides.
Enhancing trade is just the first step. Fostering deeper cultural ties and knowledge exchange is equally important. Imagine Canadian universities collaborating with African and Caribbean counterparts to develop cutting-edge solutions in agriculture or renewable energy. The possibilities are boundless, but they won’t develop unless we seize the moment.
Acta, Non Verba; Deeds Not Words
The time to act is now. Vermont Strategies has been a consistent champion for expanded trade with Africa and CARICOM, and we’ll continue advocating with the Trudeau government to prioritize strengthening these $3.3 billion and $5.7 billion USD trading relationships respectively.
After all, there’s a Free Trade Agreement to sign, and consequently, even more revenue for Canadian businesses to earn.
Our economic story has undoubtedly hit a fork in the road. But it’s still possible to turn the page and forge a story of resilience, then triumph. We must - our economic future demands it.
