Experts dissect the pressing issues facing Canada at the 48th Annual Outlook Luncheon

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Just two weeks into 2025, Canada is already facing a political shakeup, ongoing threats from the U.S. president-elect and a raft of chronic economic pain points. These issues and more were dissected at the 48th Annual Outlook Luncheon hosted by National Post, Financial Post and the Canadian Club of Toronto at the Royal York Hotel on Wednesday. This year’s panel of experts included Bank of Nova Scotia senior vice-president and chief economist Jean-François Perrault, National Post columnist Tasha Kheiriddin, Bell Media anchor Amanda Lang and Starlight Capital chief executive and chief investment officer Dennis Mitchell. Below are some highlights from the discussion, moderated by Financial Post business correspondent Barbara Shecter.

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How to respond to a ‘bully’

This year’s luncheon came in the middle of an historic week. On Monday, Prime Minister Justin Trudeau announced he would step down as Liberal leader as soon as a replacement is chosen, and prorogued Parliament until March 24. The next day, U.S. president-elect Donald Trump upped the ante in his campaign to make Canada the 51st state — claiming he’ll use “economic force” to pursue a union — and reiterating his threat to impose a 25 per cent tariff on goods imported from Canada and Mexico.

Amanda Lang suggested it might be a “blessing in disguise” that Parliament is prorogued when Trump takes office later this month.

“There is such a thing as overreaction to an incendiary Donald Trump and his first weeks or even a couple of months in office,“  she said. “Maybe if we could just cool it a little bit and not react to every twitch or tweet, we might be better served.”

The panellists disagreed over how Canada should respond to Trump’s annexation comments. While Tasha Kheiriddin suggested the Canadian government take a “strong stand” and impose its own tariffs, Dennis Mitchell endorsed a more “results oriented” approach seeking to redirect Trump’s attention elsewhere.

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“If my choices are broadly, pre-emptive economic war with the United States to show a bully that we won’t be bullied, or to placate a bully and have them pivot, look somewhere else for a fight …  (the latter is) the approach I would take,” he said.

Who will lead the Liberals?

Names including former Bank of Canada governor Mark Carney, former finance minister Chrystia Freeland, Industry Minister François-Philippe Champagne and former B.C. premier Christy Clark were thrown around by the panellists. But with Trudeau’s resignation being so fresh, Kheiriddin pointed out that it’s anyone’s game at this point.

“I wouldn’t bet money on it right now, because they have an open leadership process, and that’s the biggest problem. Anyone can join who’s 14 years old and ordinarily resident in Canada. And if that scares you, that should, because this opens the race up to foreign interference, to special interests, to mischief-makers,” she said.

Jean-François Perrault said a leader with a “compelling economic vision” has a better chance of winning or at least rebranding the party, and posed a question: What kind of leader do the Liberals want?

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“Are they going to pick somebody whose vision is going to be compelling for how the economy works going forward, or, you know, a political operative?”

Economic vision wanted

The panelists agreed that whoever is elected as Canada’s next prime minister — whether it’s Conservative Party Leader Pierre Poilievre or the new Liberal Party leader — will need to have an economic plan to move the country forward.

Kheiriddin said as opposition leader, Poilievre hasn’t had to lay out the specifics of his economic plan because Canadians are fixated on the current government and its failings.

“I think people are attracted by the promise of change, and so Poilievre’s promise doesn’t have to be that granular, and so that’s why there’s such a gap between the two parties,” she said. “It will be interesting to see as the Liberal leadership unfolds, if that gap starts to narrow.”

Perrault questioned whether a Conservative government would be able to pursue tighter fiscal policies, given the uncertainty the country is currently facing, but said we will find out more about their intentions soon.

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“One of the advantages, I think, of being in a political transition is that a new Liberal leader in an election campaign will force the Conservatives to have a new clarity as to how they would take the country forward,” he said.

From immigration to prosperity

High immigration levels during the COVID-19 pandemic to compensate for labour disruptions laid bare Canada’s problems around housing and affordability and “provoked a series of crises and also a loss of confidence in the government,” said Kheiriddin.

“It’s given a raw deal to newcomers, blackened our image around the world, because people come here and what they were told isn’t true when they’re living nine people in a basement in Brampton and they don’t have the life they thought they have,” she said.

In a country where business investment has been falling for nearly a decade, Perrault said Canada’s population grew too fast for the economy to accommodate. The question, he said, is what needs to change within Canada to successfully leverage a growing population to prosper in a way that other countries can’t.

“What we see on the demographic side here is a game changer compared to other countries,” he said. “There’s a downside, I totally understand, but I think that downside flows from the fact that immigration … will expose (and) remind us of a key weakness in Canada, which is that we don’t invest enough and our businesses don’t invest enough.”

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A question of culture

The challenge on the investment side, said Perrault, is that we don’t know why Canadian firms invest less than their international competitors.

“It’s also kind of the culture of the country, where we aren’t savage on the competition side,” he said. “We’re okay with small companies, and we’re okay with paying more for the price of milk and we’re okay with paying more for cars than in the U.S. just because we’re much more complacent. It’s all these things that work to hinder us.”

While Perrault said we’re living in an “era of uncertainty,” Mitchell said that shouldn’t stop businesses in Canada from focusing on innovation.

“We just need to do more here with what we have. We need to create more wealth here, we need to allow people to keep more of it, and that will drive spending, that will encourage greater investment and that will lead to greater prosperity,” he said.

Mitchell said Canada doesn’t lack opportunity, resources or the right attitude — just a willingness to act.

“We export a ton of things to the United States…. We send them oil, gas, nickel, copper, steel. We send them precious minerals and metals,” he said. “Why don’t we keep them here and innovate and build things here and employ people? Why don’t we create more economic activity within this country such that wealth grows, and prosperity is spread?”

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The allure of higher salaries and the potential for “enormous” economic opportunities in the U.S. compared to a smaller and less competitive market also contributes to Canada’s brain drain of skilled workers, said Mitchell.

“There isn’t the same competitive tension (in Canada). And again, rewards south of the border are so much bigger, that’s where that top one per cent go.”

• Email: jswitzer@postmedia.com

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2025-01-09 20:03:21

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