Education, immigration, trade can lift Canada’s growth prospects: central bank

OTTAWA — To lift the economy’s future growth prospects, a top Bank of Canada official is pointing to three areas that have helped the country in the past and could do so again: education, immigration and trade liberalization.

In a speech today in Ottawa, Bank of Canada deputy governor Lawrence Schembri says the country’s potential output gauges what the economy can achieve on a sustainable basis over the long run.

Schembri says Canada, like most advanced economies, has watched its growth in potential output follow a general, downward trend in recent decades — in large part due to the “formidable challenge” of aging populations.

In prepared remarks of his speech, he says Canada can turn to policy solutions that have helped support potential growth in the past.

Schembri argues that education and training will help workers keep up with the acceleration of technological change, make them more productive and help reduce income inequality.

He says the expansion of immigration levels delivers an obvious injection to the labour supply, however, he adds that the country must do a better job of matching newcomers’ skills with the needs of the workforce.

The deputy governor says Canada could get a bigger boost from trade by opening up new avenues and lowering more barriers for companies. It must, however, maintain a focus on ensuring workers will also see some of the benefits, he said.