It’s time we Canadians were honest with ourselves. We are no longer the great economic power we once were – not because we don’t have a committed and innovative business sector, world class resources or an outstanding labor pool.

We can still proudly say we have all that. What we don’t have is a very competitive business environment – and those companies that attempt to persevere have been scraping by under the weight of a crushing tax system that has stagnated business productivity and GDP per capita. This is not hyperbole, this is fact. 

If we want to resume our place as a global economic leader, we must acknowledge our current situation and demand change from our federal government. And it’s imperative the Canadian Trucking Alliance must lead this charge for our sector.

If we were to hold up a mirror, we would see that between 2015 and 2023 Canadian productivity grew at a measly rate of 0.2% per year. The Bank of Canada recently described our present productivity and investment woes as a crisis, urging government to “break the glass.” The BoC explained: 

“Back in 1984, the Canadian economy was producing 88% of the value generated by the U.S. economy per hour. That’s not great. But by 2022, Canadian productivity had fallen to just 71% of that of the United States. Over this same period of time, Canada also fell behind our G7 peers, with only Italy seeing a larger decline in productivity relative to the United States.”

How did this happen? Italy, my mother’s birthplace, holds a cautionary tale for our industry and country. 

In 1990, that country had a GDP per capita very similar to the U.S. – $20,000 vs $23,000. Today the number is $37,000 vs $80,000. A tale of two economies.

A cautionary tale

How did this happen in Italy? According to a Kellogg School of Management professor at Northwestern, it was high taxes and crushing government regulations that helped fuel the underground economy and undermine legitimate businesses in various sectors. Sound familiar?

The Canadian GDP per capita, might not be as bad as Italy, but if these trends continue, we are on pace to see our economy and nation similarly shrink into the shadows. 

In a recently released report appropriately titled, We’re Getting Poorer, the Fraser Institute painted a very worrisome picture: 

• Canadians have been getting poorer relative to residents of other countries in the OECD. From 2002 to 2014, Canadian income growth as measured by GDP per capita roughly kept pace with the rest of the OECD. From 2014 to 2022, however, Canada’s position declined sharply, ranking third-lowest among 30 countries for average growth over the period.
• Between 2012 and 2022, Canada lost ground compared to key allies and trading partners such as the United States, United Kingdom, New Zealand, and Australia, with Canadian GDP per capita declining from 80.4% of the U.S. level in 2012 to 72.3% in 2022.
• Looking forward to 2060, Canada’s projected average annual growth rate for GDP per capita (0.78%) is the lowest among 30 OECD countries.
• Canada’s GDP per capita (after adjusting by inflation), which exceeded the OECD average by US$3,141 in 2002 and was roughly equivalent to the OECD average in 2022, is projected to fall below the OECD average by US$8,617 in 2060.

And what are the reasons for these disastrous numbers according to the Fraser Institute?

“The root cause of Canada’s declining long-term growth in GDP per capita — recent and projected — is very low or negative growth in labor productivity reflecting weak investment in physical and human capital per worker.”

CTA believes that Canada’s productivity slowdown must be addressed with some urgency. CTA is currently consulting on a tax and labor proposal that will allow companies and employees of the trucking industry to thrive, not stagnate. 

Items like the carbon tax, CCA rates, business tax rates, federal excise taxes, PSB enforcement, T4As, personal tax deductions for truck drivers and other labor issues will be on the table.

It’s time to correct course and bring back a tax and regulatory system that incentivizes business growth and encourages wealth – two universal goals of almost any businesses, which have come under attack by current tax policies and the lack of tax fairness through poor enforcement mechanisms, in the trucking sector specifically. 

CTA will be looking for like-minded organizations to support these initiatives that are being developed. 

Will face opposition

We will face opposition because doing anything for the business community isn’t a priority for some interests. We must remember what we are fighting for. We must not take for granted that the economic health of this nation is not a given – it must be nurtured and maintained. That isn’t always easy – but it’s not too late to change course and reverse a bleak future for our children and their children. 

Let my ancestorial country be a cautionary tale for all Canadians. Italy is a beautiful country, yes, but in 30 years the Italians went from a globally respected economic force to rock bottom. This is not an Italian economy exclusive issue, the factors that created this economic crisis are growing fast in Canada.

The Bank of Canada and Fraser institute are holding a mirror up to us. It’s not very pretty right now but we need to look – and look hard. CTA will do this. Headwinds will be presented to us. Join the fight, help CTA pushback. It won’t be easy, but nothing worth fighting for ever is.