RBC launches The Growth Project image credit shutterstock

Canada is stuck in an economic rut. The economy, when adjusted for inflation and immigration, is smaller than it was before the pandemic. And it is pretty much in the same place it was a decade ago.

Against this backdrop, RBC is launching The Growth Project, a multi-part initiative focused on Canada’s economic growth trajectory. The initiative will offer key insights into productivity, AI, the agriculture sector, immigration, trade, and skills development. In addition, it will propose actionable strategies that can help solve Canada’s growth problems.

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“Canadians are telling us that economic uncertainty, low growth yet higher prices, is their top concern. Addressing these issues has become a key focus for RBC. We’re convening stakeholders across the country, exploring ideas and solutions that can put our economy on a better growth track. We’re also making strategic investments to help Canada’s workforce meet current and future labour market needs,” said John Stackhouse, SVP, Office of the CEO.

RBC Economics & Thought Leadership has launched the inaugural Growth Project research report titled Canada’s Growth Challenge: Why the economy is stuck in neutral. The report explores the conditions that have led to Canadians working more but producing less. It explains why collective productivity is Canada’s most pressing economic challenge.

“When we look at the Canadian economy since the turn of the century, it’s clear that our growth has stagnated. On average we’ve seen productivity growth of less than 1% per year. The problem is even more acute when we compare Canada’s growth against that of the US where our per-capita GDP runs 30% below US levels,” said Nathan Janzen, assistant chief economist, RBC Economics & Thought Leadership.

“It’s a multitude of issues contributing to the problem, from a lack of business investment to cumbersome tax regulation. What our research shows is that the solutions are not easy to implement but are clear and attainable.”

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Canada’s Growth Challenge: five growth-positive policies

  • Cutting red tape and reducing internal trade barriers. Increase the speed and predictability of project approval times and lower potential holding costs for businesses planning new investments in Canada.
  • Better utilisation of immigrant skills. Recognising the credentials of foreign-trained professionals in fields like healthcare to increase the productivity and earnings of those workers and help address the chronic undersupply of those workers in the labour market.
  • Improving tax competitiveness: Policymakers should aim to make sure tax rules can be easily understood to encourage compliance, especially among those that are most in need of the benefits, i.e., new businesses and lower-income households.
  • Adopting new technologies: “Smarter” investments like artificial intelligence can help but adoption rates are low in Canada. Making it easier to invest in new technologies is critical to maintaining global competitiveness, improving the efficiency and predictability of Canada’s complicated project approvals system and simplifying the tax system would benefit these investments.
  • Capitalising on a highly educated workforce: Increasing the utilisation of work-integrated learning placements (co-ops and internships) would help to better match the developments of skills in the economy with current and future labour market needs.

Preparing Canadians for the workforce of tomorrow

In addition to driving key insights about Canada’s growth and productivity challenges, RBC is helping Canadians develop the skills they need to excel in tomorrow’s workforce. Reinforcing this commitment, the RBC Foundation is making a total of $2m in donations to five Colleges in Atlantic Canada to support green skills education and training across the region.