Résumé
Economic Survey of Canada, 2000
After a difficult and lengthy adjustment period, the Canadian economy ended the decade on a strong note, as policy measures implemented during the 1990s have established a sound foundation for better economic performance. The inflation-targeting framework adopted in 1991 has created a low-inflation environment. Improved budgetary positions of governments have put the high public-debt-to-GDP ratio on a clear downward path. Structural reforms in key areas a decade or more ago, which were complemented by important changes to the unemployment insurance system in 1996, have also enhanced conditions for growth. These policy efforts have begun to pay off, as manifest in the current healthy pace of economic expansion and the decline in the unemployment rate to historically low levels. The challenge for policymakers now is to ensure that these favourable developments are sustained. With the economy possibly operating above its estimated potential, a further tightening in monetary conditions from mid-year levels would seem to be warranted to avoid the emergence of excess demand and ensuing inflation pressures if the economy's strong momentum persists. As to fiscal policy, priority should be given to continued debt reduction while creating room for desirable changes to the tax system, by maintaining tight control over spending. In this framework, extreme care is needed to avoid new initiatives with long-term spending implications in response to short-term revenue windfalls. At the same time, there is scope for advancing the structural policy agenda to enhance economic efficiency and thus provide the wherewithal for an improvement in the standard of living in both absolute terms and relative to trading partners. Finally, greater use of economicincentives and instruments would help avoid environmental degradation and resource depletion to the detriment of current and future generations, thus enhancing environmentally sustainable growth over the longer run. |
