Charles St-Arnaud: Canada must stop relying on consumers and focus on production to boost the economy
Canada’s overreliance on debt-fuelled consumer spending has undermined productivity, business investment, and long-term economic growth, writes Charles St-Arnaud, chief economist at Servus Credit Union. Weak productivity is constraining incomes and demand, meaning the country must focus on strengthening the supply side through investment, competitiveness and financial-system and tax reforms. “This new economic model will come with its challenges. Households will no longer be at the centre of the economy and will be required to make sacrifices to ensure Canada’s long-term prosperity in the form of subdued spending growth, deleveraging and increased saving,” he says. “Their long-term reward will be faster income growth, increased purchasing power and improved affordability.”
