‘Relatively aggressive’ change needed to lift Canada’s economy
Bill Morneau has tapped McKinsey & Co.'s Dominic Barton to draw a plan to lead Canada out of its cycle of feeble economic growth.
MONTREAL — The man hand-picked to help revive the Canadian economy enters the job with a lot of hope, but he’s adamant that the country needs to act – and soon.
Dominic Barton, the global managing director of consulting giant McKinsey & Co., was tapped by Finance Minister Bill Morneau to chair a federal advisory council responsible for drawing up a plan to lead Canada out of its cycle of feeble economic growth.
Barton spoke to The Canadian Press in a wide-ranging interview about his new role on a council made up of 14 people from the world of business and academia.
He also offered a peek at his potential prescriptions for Canada.
Barton, whose services are sought out by corporate and government leaders around the world, said many of the country’s existing sectors hold significant promise and he’s already zeroed in on new growth areas Canada should pounce on.
Staying the current economic course, however, should not be an option, he warned.
“I think there’s so much potential to unlock and opportunities going forward, even though there’s challenges,” Barton said during his first extensive interview since being named chair of the growth council last winter.
“If we don’t do anything, it’s not a good picture because we’re an aging population…. It’s actually important we do do something, I think, relatively aggressive.”
Barton’s ideas include pushing deeper into Asian markets, learning precisely how to help smaller companies scale up and enticing huge investors from here and abroad to pour cash into major public infrastructure projects, like railways and roads.
In sharing his suggestions, Barton stressed he didn’t want to presuppose what the council will ultimately come up with in its recommendations.
But with 30 years of global consulting experience, his recommendations will command a lot of attention from Morneau, Prime Minister Justin Trudeau and his fellow council members.
The group, which met for the first time Monday, begins its work as the country struggles through an extended period of weak growth and tries to shake off the net negative impact of low oil prices.
The finance minister, Barton said, has instructed the council to consult broadly for fresh ideas on how to grow the economy over the long haul.
“At the end, we want to focus on three to five big ones that will actually move the dial, as opposed to 30 that we spread like peanut butter,” said Barton, who has written and spoken extensively about the pitfalls for leaders who are fixated only on the short term.
“Bill kept saying… ‘Don’t constrain yourself. We’ll decide what can be done or not… We want ideas.”’
With Canada’s highly educated, respected population and strong research facilities, Barton believes the country is well-positioned to take advantage of the current economic trends.
He also said Canada could be doing far more to go after the Asian market without reducing the volume of business it does with the United States.
Barton, who has years of experience working and consulting in Asia, said Canada needs more trade on the continent through vehicles like the 12-country Trans-Pacific Partnership and, perhaps, an eventual free-trade deal with China.
Another way he thinks Canada can lift its moribund productivity is by boosting infrastructure investment in a big way – by finding cash in places outside the public treasury and even beyond Canadian borders.
Barton supports Ottawa’s intention to attract capital from institutional investors like major public pension funds.
He pegged the infrastructure gap – the difference between what Canada needs and what it has – at a level as high as $500 billion. Middle-income Canadians, he argues, would benefit from infrastructure projects because they would increase productivity.
The Liberal government won last October’s election on a platform that promised to double Canadian infrastructure spending over the next decade to $120 billion.
With few countries committing to infrastructure spending, Barton believes Canada can lead the world.
“It’s amazing that no G7 country has been investing in infrastructure when interest rates are at 50-year lows,” he said. “This is shocking.”
In existing sectors, Barton says with the growing desires of the world’s middle class he believes Canada has all the ingredients to build “global champions” in its agri-food industries _ everything from dairy, aquaculture, beef and soybeans.
His optimism for the future isn’t reserved for large companies, either.
Canada, he said, has more small and medium firms than many counties. For example, Barton said through new technologies, such as the Chinese e-commerce heavyweight Alibaba, a cherry farmer in British Columbia can access global markets and sell his wares in Asia.
But these types of advancements, along with the expansion of automation and robotics, mean the country must ensure its workers have the right skills to keep pace with the surprisingly rapid pace of change, Barton said.
Canada’s 18 million jobs are destined to look a lot different 10 years from now, he added.
“If we aren’t careful, I don’t think it’s going to be a very good story.”News from © Canadian Press Enterprises Inc. 2016