The release of Budget 2024: Fairness for Every Generation by the federal government of Canada has sparked widespread reactions due to its significant deficits and associated fiscal measures. Central to these discussions is the potential impact of these measures on Canada's already struggling productivity. The key question revolves around how these measures will affect the ability of businesses, professionals, and sole proprietorships to offer products and services at lower costs, thereby improving the quality of life and boosting the economy.
A recent article in the business newspaper "Les Affaires" highlights the evolution of productivity measures from 2020 to 2024. Monique Leroux, former president of the Industry Strategy Council, emphasizes the need for businesses to adopt new technologies and demonstrate greater ambition and leadership to enhance productivity. "...it is rather the attitude of businesses that we must be change."
"...c’est plutôt l’attitude des entreprises qu’il faut changer. Elles doivent être plus ambitieuses, plus entrepreneuriales, plus agiles, aussi bien pour la prise de décision que de risque. Pour être plus productif, il faut miser davantage sur les technologies." https://www.lesaffaires.com/dossier/pme-garder-la-tete-hors-de-l-eau/monique-leroux-notre-productivite-reflete-notre-manque-dambition/648817
While Leroux remains vague about the direct effects of government policies on productivity, recent observations suggest that fiscal policies can indeed have a detrimental impact. This raises the question: can the absence of fiscal policies be beneficial to productivity? In essence, when do federal policies begin to influence productivity, particularly in terms of fiscal policies? The article may prompt the reader into considering if whether Canadian businesses can achieve productivity gains when fiscal policies may inadvertently discourage them. Are the necessary incentives lacking?
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