OECD Forum on the Restated Jobs Strategy Canada Country Report

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OECD Forum on the Restated Jobs StrategyCanada
Country Report

• Human Resources and Social Development Canada
• OCTOBER 30-31
• TOKYO, JAPAN

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Canadas recent economic performance has been
strong

• The Canadian economy continues to record solid
  growth with strong macroeconomic fundamentals
• GDP growth of 2.9 in 2004 and 2005
• Low levels of inflation (currently 2.1)
• Adjustments to dollar appreciation and energy
  prices
• Surpluses in fiscal and external current account
  balances
• Declining debt-to-GDP ratio

Source OECD Employment Outlook (2006)
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Canadas labour market is delivering its
strongest performance in decades

• Robust employment growth
• Rising rates of participation and employment
• Declining unemployment rates
• High rates of immigration

Source OECD Employment Outlook 2006
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The labour market has responded well to external
pressures

• The Canadian economy is highly open to
  international trade and capital flows
• Total trade represents a relatively high
  proportion of GDP 72 in 2005.
• The Canadian dollar has risen more than any other
  major currency since the beginning of 2003.

Nominal Effective Exchange Rate of Major
Currencies
Source Department of Finance Canada calculations
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and is considered to be flexible and resilient

• Canadas regulatory and institutional framework
  supports a flexible, dynamic
• market
• Canada has the third least restrictive employment
  protection legislation among OECD countries
  (2003)
• OECD Employment Outlook (2006)
• and the workforce has the capacity to adjust to
  increasing skill requirements
• Nearly half (45) of adults hold a post-secondary
  qualification more than in any other OECD
  country
• Canada ranks 6th in university completion among
  OECD countries (22 of adults)
• OECD Education at a Glance (2006)

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But a number of factors pose challenges for
creating jobs and ensuring growth
Population aging
Globalization
Global economic uncertainty
Rising world demand for natural resources
Knowledge based economy
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and there is unevenness in the national labour
market

• Labour participation rates for some groups are
  well below the national average

Participation Rates

• As well, structural adjustments have lead to
  disparities in regional labour market performance
  

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Change in emphasis in 2006 Jobs Strategy versus
1994 Jobs Strategy

• The 1994 Jobs Strategy aimed at reducing high and
  persistent unemployment.
• Ten years later, the re-stated Strategy places
  emphasis on
• Appropriate macroeconomic policy
• Removing barriers to labour market participation
• Tackling labour and product market obstacles to
  labour demand
• Facilitating development of labour force skills
  and competencies

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Current Government of Canada Directions

• The Canadian government is committed to make
  federal spending more transparent,
  accountable and disciplined, while creating
  greater opportunity for Canadians, investing in
  our families and communities, and making our
  streets safer and our borders more secure.
• Budget Speech, May 2006
• the Government will be bringing forward
  fiscally responsible budgets and a legislative
  program that will achieve the results that
  Canadians expect.
• Speech from the Throne, April 2006

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Pillar A Set appropriate macroeconomic policy

• Monetary policy should aim at price stability and
  sustainable public finances
• Macroeconomic policy should be used to help
  stabilise the economy

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Pillar B Remove barriers to labour market
participation

• Implement well-designed unemployment benefit
  systems and active labour market policies
• Make other non-employment benefits more
  work-oriented
• Facilitate family-friendly arrangements
• Adjust taxes and other transfer programmes to
  make work pay

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Pillar C Tackle labour and product market
obstacles to labour demand

• Ensure that wages and labour costs respond to
  labour market developments
• Enhance competition in product markets
• Facilitate the adoption of flexible working-time
  arrangements
• Ensure employment legislation helps labour market
  dynamism and provides security to workers
• Promote transitions to formal employment

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Pillar D Facilitate development of labour force
skills and competencies

• Promote high-quality initial education and set
  conditions to improve labour force skills
• Facilitate school-to-work transitions