OECD Economic Surveys: Canada 2003
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OECD Economic Surveys: Canada 2003

This 2003 edition of OECD's periodic survey of Canada's economy focuses on key challenges including raising living standards, international migration, and managing fiscal pressures in the medium and long-term.
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Raising Living Standards You do not have access to this content

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OECD

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Canada has undertaken wide-ranging and impressive economic reforms over the past 15 years. The regulatory environment and the incentives facing firms and individuals have been substantially improved through measures such as tax reform, the North American Free Trade Agreement, reducing and simplifying tariffs, clearing away barriers to internal trade, privatising public enterprises, shaking up the public sector, and revamping labour market programmes to promote job attachment. Macroeconomic policies are also now on a sound footing. The payoff is clear: the sustainable growth rate has risen, and unemployment has been reduced. When measured against the OECD as a whole, Canada is now performing well in most areas. However, it has the advantage of being closely integrated with the dynamic US economy and so tends to grade itself not against the OECD or even the G7 average but against its southern neighbour. By setting a higher benchmark, the comparisons are often less flattering. Most conspicuously, and as noted in Chapter I, per-capita incomes in Canada are around 15 per cent below those in the United States. This chapter looks at ways to close the gap in living standards. Over the long term, the most important requirement by far is to increase productivity. To do so, Canada must focus on boosting innovation, competition and skills. Income levels can also be raised by further boosting employment rates, and several policy options for improving the labour market are discussed. However, living standards ultimately depend on more than just percapita incomes, and the chapter touches on several environmental aspects of sustainable development: water quality, air pollution, and climate change.

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