Economist Niels Veldhuis recently presented to the Rotary Club of Tsawwassen, outlining five reasons why we should be worried about Canadian complacency as it pertains to the economy:
With an average of $37,000 of debt per Canadian, we are unduly burdening the next generation. Interest payments alone on this enormous debt are more than the total amount we spend on education. With interest rates at an uncommon low, we will fully feel the effect of this only when they begin to rise.
The number of Canadians over 65 will increase from 12.5 per cent of the population in 2000 to 24.2 per cent of the population by 2040. With more people consuming health care and other old age payments, spending on education and social services will be adversely affected.
The rate of new business start-ups is plummeting. New firms of five to 20 employees are the life-blood of a thriving, prosperous economy. Unfortunately, such start-up companies have declined by nearly 40 per cent over the last decade.
Uncompetitive personal income tax rates continue to penalize Canadians. Research has shown that these rates create a disincentive for workers - especially younger ones - to work hard, increase their skills, invest and engage in entrepreneurial activities.
Ontario, our most populous province, has underperformed the Canadian economy for the last decade and continues to do so. The
province has the highest electricity prices, highest taxes, a high provincial deficit, is losing business opportunities to the U.S. and has generally mismanaged its economy. These conditions must be remedied in order to restore economic performance. To be a strong Canada, we must have a strong Ontario.
Veldhuis is one of Canada's most-read privatesector economists. He has written six books and more than 50 comprehensive studies on a wide range of economic topics.
