OECD Forum on the Restated Jobs Strategy Canada Country Report Human Resources and Social Development Canada OCTOBER TOKYO, JAPAN

2 Canada’s 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 )

3 Canada’s 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

4 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 The Canadian dollar has risen more than any other major currency since the beginning of Nominal Effective Exchange Rate of Major Currencies Source: Department of Finance Canada calculations

5 … and is considered to be flexible and resilient Canada’s 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 6 th in university completion among OECD countries (22% of adults) OECD: Education at a Glance (2006)

6 Globalization Rising world demand for natural resources Population aging Knowledge based economy Global economic uncertainty But a number of factors pose challenges for creating jobs and ensuring growth …

7 … and there is unevenness in the national labour market As well, structural adjustments have lead to disparities in regional labour market performance Labour participation rates for some groups are well below the national average Participation Rates

8 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: A.Appropriate macroeconomic policy B.Removing barriers to labour market participation C.Tackling labour and product market obstacles to labour demand D.Facilitating development of labour force skills and competencies

9 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

10 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

11 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

12 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

13 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