AIMS delivered a sobering message on Canada’s productivity and competitiveness at the invitation of the Standing Senate Committee on Banking, Trade and Commerce. Senators were told that regional policy in Canada has been an obstacle to improving productivity and therefore the all-important standard of living of Canadians. For the good of Atlantic Canada, as well as the country as a whole, the steps that need to be taken are clear: reform Equalization, Employment Insurance, and regional development programmes such as ACOA.
The standing committee was directed by the Senate to examine and report on issues dealing with productivity and competitiveness. AIMS was one of the groups specifically invited by the Senate committee to make a presentation.
AIMS Director of Research Services Bruce Winchester used examples from the aquaculture industry, labour market and business community to make the point that Canadian productivity is suffering because of poor public policy.
On the topic of equalization Winchester explained, “Ultimately the best thing for equalization is to reward good provincial policy decisions, such as lowering income and capital taxes, which ultimately raises provincial capacity so that the program gradually puts itself out of business. As it stands, the program is an impediment to productivity growth in all receiving provinces, and does not contain the right incentives to encourage greater productivity.”