Race to the Top: Developing an Inclusive Growth Agenda for Canada

Abstract

Governments around the world are coming to grips with the realization that growth needs to lead to more broadly-shared prosperity. There is a growing recognition that many of the benefits of globalization and free trade policies have not been broadly shared. This report provides a comprehensive and applied analysis of “inclusive growth” as a means for sharing economic gains more broadly and equitably throughout society. In our increasingly digital and global world, there is fierce competition for talent and capital that will be won by the most inclusive jurisdictions. Inclusive growth strategies, the report finds, enable governments to effectively manage disruption and the transition to an increasingly digital economy in a fair manner that generates well-paying, stable jobs. The report also finds that an inclusive growth path is particularly important for Canada. Canada is facing a prolonged period of little or no growth (“slowth”) with clear challenges related to income inequality, wage stagnation and a growth in precarious forms of work. Our analysis shows that reliance upon another commodity boom, export-led growth or further gains from increasing women’s employment is, for various reasons, unlikely to resolve these challenges. We explore a variety of options for shaping both how markets perform (pre-distribution) and how government policies are developed (redistribution), and provide specific recommendations to policymakers on developing an inclusive growth agenda for Canada.