Economic challenges shaping election battle: Political leaders urged to keep Canada competitive

Global competitiveness and trade issues are topping the agenda for Canadian business leaders as the federal election heats up.

Canada's competitiveness in relation to China and other expanding markets should be the top economic issue heading into the fall campaign, they add.

"That (competitiveness issue) is the central economic challenge facing Canada," says Ross Laver, vice-president of policy and communications for the Ottawa-based Canadian Council of Chief Executives (CCCE). "Until recently, our economy has been growing at a good clip. The issue is that we're facing a number of serious challenges, in part because of the relentless competition from emerging markets."

A non-partisan organization, the CCCE is calling on all party leaders and parliamentarians to implement the recommendations of a federal competition review panel as soon as possible. The panel, whose findings were released in June, recommends changes to tax policy, stronger efforts to attract and retain talent, the removal of inter-provincial trade barriers, and improved flow of goods and services across the Canada-U.S. border.

Jock Finlayson, vice-president of policy for the Business Council of British Columbia, says Canada's next government must also quickly lay out a more detailed "competitiveness agenda.

He says Canada needs to pick up the pace on bilateral and multi-lateral trade agreements to make sure this nation is not at a disadvantage to other countries that have already signed deals.

"(Standing up for NAFTA) is an issue that would have some traction in the business community," says Finlayson. "NAFTA's not perfect, but it does give us better access to the U.S. market than we would have without it."

Bernard Courtois, president and CEO of the Information Technology Association of Canada, says it's important for candidates to advocate in favour of NAFTA - but they must tread carefully.

"I don't think it's wise to try and stick our nose into the U.S. (presidential) campaign, because in effect, we're intervening in a dynamic that's not really directed at us," says Courtois. "It's important to advocate around the benefits of more open trade, and then let things take place after that, once the American president is chosen."

Market conditions in this country and around the world show the need for Ottawa to develop an international competitiveness strategy, he adds.

"We'd like the various parties to address what are the big issues - the competitiveness issues in the economy, the environment, our demographic and skills challenges - and how they see technology fitting in as a solution to that," says Courtois.

The election campaign, he expects, will test Liberal Leader Stephane Dion's previously expressed support for developing new technology and promoting research and development tax credits to address environmental challenges. He says the Liberal emphasis on its "green" action plan, which includes a federal carbon tax, will result in other parties putting out less detailed policies in favour of criticizing the Grit strategy.

Corinne Pohlmann, vice-president of national affairs for the Canadian Federation of Business, says small and medium-sized businesses are looking for help from candidates on how to deal with the rising cost of fuel.

"A lot of our members are opposed to carbon taxes, even if there's a decrease in other taxes, because it really doesn't end up being that revenue-neutral for a lot of businesses that are out there," she says.

CFIB members also want to know the parties' positions on reducing regulatory paperwork across all sectors, and their plans related to labour - especially dealing with labour-shortage issues, financial support for training, and changes to the Employment Insurance (EI) system.

She says EI, last changed in 1996 when the unemployment rate was double the current level, must reflect the needs of today's labour market.

Pierre Alvarez, president and CEO of the Calgary-based Canadian Association of Petroleum Producers (CAPP), says energy costs may not be a focal point of the campaign because commodity and consumer prices are subsiding.

"The big one for us (during the election) is to focus on energy research and technology development," says Alvarez. "Canada does have a huge resource base - everything from uranium to natural gas, oil and coal - but they're tough resources. They're tough from an economic point of view, but they're also a challenge from an environmental point of view."

Oil and gas producers are not calling for party leaders to stand up for NAFTA, Alvarez adds, noting the energy sector enjoys considerable cross-border transparency and openness as billions of dollars worth of natural resources go back and forth every day.

Alberta Federation of Labour (AFL) president Gil McGowan says the political candidates don't need to defend NAFTA because Canada will benefit if it is reopened.

"If (U.S. presidential candidates) John McCain and Barack Obama want to renegotiate the energy provisions of the NAFTA agreement, I say bring it on," says McGowan.

"I don't think Canadians should be afraid of reopening the NAFTA agreement because, frankly, it wasn't a particularly good agreement to begin with. Thanks to the rising price of oil and the abundance of oil in Western Canada, we're in a much better bargaining position than we were 15 years ago."

The current deal, he adds, prevents Canada from reducing energy exports to the U.S. while prices are high and demand from Asia is increasing.

And like business leaders, the AFL boss wants to hear how party leaders will improve Canada's global competitiveness.

"It seems Stephen Harper and the Conservatives have only one answer related to the economy - and that's to cut taxes," says McGowan. "But that's not good enough. We need a real industrial strategy from our politicians, one that will allow us to compete head-on with other countries around the world and which will allow us to create and keep good jobs here in Canada."

McGowan says Western Canada, especially Alberta, has been insulated from the downturn that is being felt in the rest of the country.

"Here in Alberta, it's easy for people to forget that Canada is facing a manufacturing crisis, and it doesn't seem the federal government is doing anything to address it," he says. "There are thousands of jobs lost in places like Ontario and Quebec."

McGowan also wants candidates to suggest alternatives to the temporary foreign worker program, which labour unions claim discriminates against employees from poor countries because they are not allowed to switch employers and are not assured of staying in Canada permanently.

Since temporary foreign workers are not eligible to vote, their plight is not expected to receive much airtime during the election.

However, business leaders say they can't predict which issue will be the focus of the campaign.

"Every election has its own personality," says CAPP's Alvarez.

Business Edge, Fri Sept 19 2008
Byline: Monte Stewart

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