Canadian governments must be ready to fight a potential brain drain south of the border in the face of a new U.S. administration, Bank of Canada governor Tiff Macklem said Tuesday.<\/p>\n

Protectionist policies and attitudes stemming from U.S. President Donald Trump have helped make Canada a more attractive landing spot for global talent over the past four years.<\/p>\n

But the advantage for international students and workers is likely to disappear as Trump exits the White House next month, Macklem said in a speech to the Greater Vancouver Board of Trade<\/p>\n

He says being welcoming to newcomers can help boost the economy and increase exports in goods and services needed for a recovery from the Covid-19 pandemic. Canadian schools and companies may have to fight harder to attract and retain talent after Joe Biden is sworn in as president.<\/p>\n

But Macklem warns that fighting for talent isn’t enough on its own to create a sustainable recovery, noting that governments must also invest in infrastructure and remove internal trade barriers to help exports recover.<\/p>\n

He says federal and provincial governments have co-operated often through the pandemic, suggesting it could finally lead to an end on inter-provincial trade hurdles that stymy the movement of goods, services and professionals.<\/p>\n

Government infrastructure spending should focus on trade-enhancing infrastructure so exporters know there is a way to easily get their products to market, he said.<\/p>\n

Macklem notes he met last month with leaders from several logistics companies who shared their concerns about bottlenecks, particularly at ports.<\/p>\n

The recovery so far has seen the country recoup just over 80% of the three million jobs lost during spring shutdowns and output is climbing closer to pre-pandemic levels.<\/p>\n

Macklem says much of that rebound is being fueled by household spending, but the country will need to see a rise in exports and business investment if the recovery is to be sustainable.<\/p>\n

The path exports take will rest on global forces, Macklem says, including whether international co-operation on vaccines and distribution break through protectionist policies.<\/p>\n

“Obviously, we all hope that real life turns out closer to the optimistic scenario than the pessimistic. But hope is not a strategy,” reads the text of Macklem’s speech.<\/p>\n

“We need to think strategically to increase the odds of a strong trade recovery.”<\/p>\n

The last time Canada climbed out of a recession following the 2008-2009 global financial crisis, Macklem was the second-in-command at the central bank.<\/p>\n

Even though Canada’s recession was neither as long nor as deep as other countries, domestic exports took a sharper dive. As Macklem noted in his speech, global exports fell less than 20% at the time, while Canadian exports dropped by close to 30%.<\/p>\n

The reason was a combination of weak foreign demand, particularly from our biggest trading partner in the United States, Canada’s reliance on the U.S. and other slow-growth markets instead of emerging economies largely, and a lack of competitiveness.<\/p>\n

But while the period before that crisis was relatively positive for trade, Macklem says the same can’t be said this time around, pointing to trade disputes started by Trump.<\/p>\n

As well, Canada’s trade in services, such as tourism, haven’t recovered as well as goods such as automobiles, even though service exports had been growing faster than goods.<\/p>\n

What’s needed is for companies to think about what products are in demand in fast-growing markets, Macklem says. He pointed in his speech to digital services like online education and e-commerce, or applying new technology to traditional sectors.<\/p>\n

He also says the export potential for green technology is high given global concerns about climate change.<\/p>\n","protected":false},"excerpt":{"rendered":"

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