“The last of the liberals” declares the headline of this month’s economist, with Canada sitting front and centre.
That endorsement, followed by the assertion that “Canada still holds lessons for other western countries, especially when it comes to trade and immigration.”
So what has the country done to earn the esteem of one of the world’s oldest business focused publications? Americas Editor Brooke Unger joined Jon McComb to explain.
LISTEN: What does the Economist think Canada is doing so well?
With the rise of far-right parties across Europe, Brexit in the U.K., and the Trump phenomenon south of the border, Unger says there’s a climate of isolationism sweeping the world.
“Canada kind of stands out as a kind of shining exception towards this trend of raising drawbridges and slamming doors.”
He says Canada is leading the pack in two ways. First, by admitting more immigrants – nearly 1% of the population every year – and by talking openly about the value of diversity.
Secondly, he says at a time when protectionism is sweeping the globe, Canada remains eager to sign trade deals, like CETA with Europe, or a potential deal with China.
“That fundamental question of openness to both people and to goods, to trade, you know Canada really is kind of exceptional at the moment.”
Unger compares that acceptance, or at least muted opposition to trade to the U.S., where both major party candidates have made bashing trade deals a key campaign plank, and says it may have to do with the fact that as a smaller economy, Canada is far more reliant on trade for survival.
While it may surprise some, Unger also lauds Canada for its current fiscal policy… which includes taking on big deficits.
“At a time when austerity dogma very much rules in Europe and where Republicans in the United States have certainly resisted the kind of infrastructure spending that Justin Trudeau proposes, Canada again stands out as a place where you start from from a very good fiscal position, the federal debt is pretty low as a share of GDP … you’re now in a position where you can begin to spend some money to lift an economy that’s not growing very fast.”
While he’s quick to point out Trudeau isn’t responsible for the country being in position to spend, Unger says doing it will help the country’s prospects for long term growth.
Far from perfect
Despite the accolades, Unger says Canada’s economy is far from perfect, pointing to differing tax rates for small and big businesses, protected sectors of the economy, and high consumer debt.
“Certainly there’s an agenda of things the government can be doing to make the Canadian economy work better. But, on balance you guys seem to be moving more in the right direction than a lot of governments around the world.”