“The government has an opportunity to implement growth policies, including many of its own previous commitments, without putting an unfair financial burden on future generations,” said Goldy Hyder, President and CEO of the Business Council of Canada (BCC). “This approach will ensure the long-term viability of our cherished social programs and living standards, while allowing Canada to compete and succeed on the world stage.” 

The BCC outlines two important areas where the government can instill policy certainty and unlock investment: 

Fiscal sustainability 

• As a top priority, the government should avoid introducing net new spending to help ease prices and rates for Canadians. As Bank of Canada Governor Tiff Macklem cautioned in his testimony last month to the House of Commons Finance Committee, large spending increases could “get in the way of getting inflation back down to target in the timeline we’ve laid out.”  

• With the size of the federal public service growing 37.9 per cent since 2016, it is time for a comprehensive program review. A serious assessment of current government spending should lead to real savings and allow the government to reallocate money to core priorities including national defence and economic security, the energy transition, research and development, and climate adaptation. 

• As stated in a recent BCC report, since 2020 “the federal government has never met a fiscal target it imposed on itself.” While we note the new “guideposts” laid out in the 2023 Fall Economic Statement, the BCC continues to call for a meaningful fiscal anchor that limits debt servicing costs to a maximum of 10 per cent of revenue going forward. This anchor will preserve the government’s capacity to fund social programs Canadians rely on and not put an excessive and unfair fiscal burden on future generations. 

Regulatory reform 

• The government must reevaluate ill-advised regulations, including the proposed cap on oil and gas emissions, which would exacerbate Canada’s inflation and affordability problems by applying a broad-based economic shock that will reduce tax revenues and add pressure to the federal deficit. Rather, the government should focus on providing policy certainty and the incentives necessary to accelerate investment. Without these elements, Canada will struggle to attract the capital it needs to compete in a low-carbon economy.  

• The government itself has lamented Canada’s slow and laborious permitting process, but fixing it is within its own jurisdiction and does not require new spending. That’s why we urge the government to honour its unfulfilled promise in Budget 2023 to deliver a concrete plan to improve the efficiency of the impact assessment and permitting processes for major projects. This would send a signal that Canada is ready to move with the speed and ambition needed to meet our net-zero goals.       

• As noted by the First Nations Major Projects Coalition, reducing project risk requires economic reconciliation and partnerships, including equity arrangements, with Indigenous Peoples. To eliminate barriers and ensure access to competitive capital, we expect the government to fulfill its commitment to stand up a national Indigenous loan guarantee program, one that is open to projects from all industries and sectors. 

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“Analyzing the Federal Government’s Fiscal Anchors” assesses the government’s commitment in the 2023 Fall Economic Statement to maintain a declining deficit-to-GDP ratio over the next few years and keep deficits below 1 per cent of GDP in fiscal years 2026-2027 and future years. After reviewing the Freeland-Trudeau track record on fiscal responsibility and offering ten observations, the report concludes that it is “very improbable” for the government to meet its new anchor.  

The report informed a letter by Goldy Hyder, BCC president and CEO, ahead of the cabinet retreat in Montreal that urged Prime Minister Trudeau to implement three key priorities for Canadians: 

• Adopting a meaningful fiscal anchor 
• Delivering a Plan to Improve Impact Assessment and Permitting  
• Seizing the energy transition opportunity  

“Failing to address the above priorities… invites greater uncertainty and exposes Canadians to a further erosion of their living standards,” reads the letter.  

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In advance of the 2023 United Nations Climate Change Conference, the BCC report – “Canada in the new energy landscape” – explores some of the trends in nuclear energy that Canada could take advantage of with the right combination of policy, ambition and investment. 

“Whether it is reducing emissions by 2030 or reaching net zero by 2050, nuclear power will need to play a bigger role in the Canadian and global energy mix of the future,” the report states.  

It urges policymakers to work with the private sector to advance Canada’s nuclear industry. 

Key takeaways: 

1. Three factors are contributing to a renewal of interest in nuclear power: the transition to low-carbon energy, energy security, and the development of advanced reactors. 

2. Canada has many advantages that can lead to the country becoming a major player in the global nuclear energy market, including its high-quality uranium reserves, nuclear supply chain, nuclear fuel processing capacity, long record of safe nuclear power production, and large domestic market. 

3. While large reactors may remain the preferred option for many situations, especially where power density is required for the electrification of cities and major industries, small modular reactors (SMRs) introduce greater flexibility to the nuclear energy mix. 

4. To promote a globally competitive advanced nuclear sector in Canada, policy makers should ensure competitive financing is available, regulations are clear and predictable and nuclear policy is coordinated between all levels of government. 

Read the full report 

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“Every dollar we spend on interest payments is a dollar that is not being invested in Canadians,” said Goldy Hyder, BCC president and CEO. “The federal government is now planning to spend more next year to service the debt than it will pay in healthcare transfers.”

The fiscal outlook projects debt servicing charges to be $52.4 billion in 2024-25. That same year the Canada Health Transfer will amount to $52.1 billion.

Today’s update also missed an opportunity to accelerate private sector investment and encourage economic growth. In Budget 2023 the government committed to permitting reform and a series of tax incentives to speed up the energy transition. The government must act with urgency to implement its promises in full.

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Based in Montreal, Ms. Robinson is the President and Chief Executive Officer of CN, overseeing an extensive transportation and logistics rail network that stretches across Canada and throughout North America.

“Tracy has a deep connection to all parts of the Canadian economy through her leadership role at CN,” said Victor Dodig, President and CEO of CIBC and Chair of the Board of the BCC. “The mandate of the Business Council of Canada is to help strengthen Canada’s economy and social fabric, and Tracy’s unique perspective positions her well to fully appreciate our nation’s potential and reach. Throughout her career, Tracy has been a champion of Canadian success, and we are fortunate to have her expertise help guide the work of the BCC.”

Ms. Robinson becomes Vice Chair at a pivotal moment for Canada’s economy. Members of the BCC are committed to improving the lives and livelihoods of all Canadians through long-term, sustainable, and inclusive economic growth. Among the BCC’s priorities are fiscal responsibility, strengthening Canada’s national trade-enabling infrastructure, and securing the renewal of the Canada-US-Mexico Agreement in the context of its mandatory review in 2026.

“The Business Council of Canada plays a key role in developing thoughtful and forward-looking public policy to the benefit of all Canadians,” said Ms. Robinson. “I look forward to working with my BCC colleagues to help strengthen the country’s economic prospects.”

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In a recent letter to Deputy Prime Minister and Finance Minister Chrystia Freeland, Hyder urged the federal government to use the economic update as an opportunity to prioritize two areas for action: 

• Fiscal responsibility: In an era of high interest rates and low growth, the government should avoid new structural spending and adopt a credible fiscal anchor, one which would limit debt servicing costs to a maximum of 10 per cent of revenue. Such fiscal discipline is necessary to preserve the government’s capacity to fund programs Canadians rely on and not leave future generations with an excessive and unfair financial burden.   

• Energy transition: It is critical that the government move forward with commitments it made in Budget 2023. They include outlining a concrete plan before the end of the year to speed up the regulatory process for major projects. In addition, the government must implement the incentives it announced to accelerate the energy transition. These measures will help reduce Canada’s emissions and foster economic growth for the benefit of all Canadians.   

Recognizing the essential role of private sector investment in creating jobs and economic opportunity as Canada charts a path toward a more prosperous and sustainable future, the letter to Freeland concludes with a call for partnership: “Please be assured that Canadian business leaders will do their part and support your efforts to meet the moment.”  

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“We need to wake up, embrace our strengths, and celebrate our successes,” said Goldy Hyder in speech to Canadian Club Toronto. The speech outlined practical measures to improve the economy by addressing Canada’s fiscal situation, its relationship with the United States, and ways to succeed in the energy transition. “We must rally around a common vision of prosperity for our country,” he said.

Mr. Hyder’s speech expanded on his letter to Deputy Prime Minister and Finance Minister Chrystia Freeland that emphasized the importance of adopting a meaningful fiscal anchor at a moment of significant geopolitical uncertainty abroad and a deterioration of economic conditions here at home. “Governments can no longer run permanent large deficits without fear. The era of low interest is no longer with us, and that is a reality the government must address,” reads the letter that was publicly released today.

The letter also calls on the government to move ahead with growth-enhancing measures announced in Budget 2023 to ensure a successful energy transition: “We must not lose out on once-in-a generation business investments that are necessary to reduce our emissions and foster economic growth for the benefit of all Canadians.”

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“There is no country more important to Canada than the United States,” said Goldy Hyder, president and CEO of the Business Council of Canada. “Strong relationships must be maintained and nurtured in all 50 states. Working from Washington, John will help us strengthen economic ties with Canada’s closest neighbour, friend, partner and ally.” 

Prior to joining the BCC, John served as the Head of North America for the largest trade association representing British business interests.  His extensive experience in Washington includes working as a legislative and policy adviser for two Members of Congress. John also previously worked in the Washington and New York offices of global law firms specializing in antitrust investigations and international trade and intellectual property litigation. He has held positions with both the United States District Court and the United States Department of Justice.  

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A Canadian-European lawyer, Mark has more than 20 years of corporate, commercial and regulatory law experience in the European Union, Canada and the United Kingdom.   

“Mark’s depth of knowledge of both European and Canadian issues will prove invaluable to the Council and its members,” said Goldy Hyder, President & CEO of the Business Council of Canada. “His insights will help us strengthen the Canada-EU economic and trade relationship.” 

Mark is the founder and principal of Camilleri Law, a Brussels-based EU regulatory law firm.  He is also the co-founder and President of the Canada EU Trade and Investment Association in Brussels. He holds an LL.M. in EU law from KU Leuven, an LL.B./MBA from Dalhousie University and a B.A. in international relations from the University of Toronto. 

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“Canadian companies are in the crosshairs of state-sponsored actors seeking to advance their interests in ways that undermine Canada’s national and economic security,” according to the report released today by the Business Council of Canada. “Now is the time for Canadian policymakers to recognize this reality and to come together with Canadian companies to protect the economic vitality and resiliency of our nation.” 

Based on in-depth consultations with the leaders of Canada’s most innovative and successful companies, security experts, and former government officials, the report offers a series of recommendations organized around three themes: 

• Strengthen Canada’s economic security architecture: A latticework of new and interconnected laws, policies, and programs will be required to improve Canadian companies’ ability to deter, detect, and disrupt economic security threats. This includes the Government of Canada amending the Canadian Security Intelligence Service Act to enable CSIS to proactively share threat intelligence with targeted businesses where it is in the public interest and subject to all necessary safeguards and oversight. 

• Bolster Canada’s economic and innovative capabilities: To compete against foreign state champions who do not play by established economic rules, the Government of Canada will need to complement the economic and innovative capacity of Canadian companies with a modern industrial strategy. This strategy should incentivize high-risk, high-reward research in disruptive and emerging fields which are foundational to spurring economic growth and are essential to national security. Among other things, Canada should emulate the approach adopted by the United States’ Intelligence Advanced Research Projects Activity. 

• Expand and reinvigorate Canada’s international security partnerships: To uphold and strengthen the rules-based international order that has contributed to unprecedented levels of safety, security, and prosperity, the Government of Canada should expand and reinvigorate its network of security alliances and global partnerships. This includes spearheading measures to collectively counter weaponized trade, such as establishing a “NATO for trade.” 

“Many of Canada’s closest allies – including the United States, Germany and Japan – recognize that their national security is dependent on the economic strength of their nations and have developed integrated approaches to economic and national security,” says Goldy Hyder, President and Chief Executive Officer of the Business Council of Canada. “Canada must also adopt an ‘eyes wide open’ approach to its economic and national security. It’s essential to protect our democracy, values, economy, and the wellbeing of all Canadians.” 

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