Ottawa, December 19, 2007
Archived - IMF Report Highlights Canada's Strong Economic Performance
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- International Monetary Fund 2008 Article IV Consultation with Canada Preliminary Conclusions of the IMF Mission
The report by the International Monetary Fund (IMF) Mission on Canada acknowledges that Canada's economy has outpaced those of many of the major industrialized countries. The report points out that Canada has solid economic fundamentals and a "sound policy framework" that positions the Government to weather future economic challenges.
"The IMF report confirms that we are on the right track with our long-term economic plan, Advantage Canada," said Jim Flaherty, Minister of Finance. "Our economic fundamentals are as strong as the Canadian Shield due in large part to our commitment to ongoing debt reduction, tax cuts and focused spending."
The IMF supports the Government of Canada's effort to strengthen Canada's economic union. The report suggests that to make the strong Canadian economy even stronger, the provinces and territories need to:
- eliminate barriers to interprovincial trade in goods and services and labour mobility;
- adopt a Common Securities Regulator; and
- reduce marginal effective tax rates on capital, including by harmonizing sales taxes.
"While the IMF report overall is very positive, it highlights the fact that we still have work to do to improve our productivity and competitiveness," said Minister Flaherty. "Our government agrees, and in fact is taking significant steps to meet that challenge. In the fall Economic Statement, we committed to reducing our business tax rate to 15 per cent by 2012, giving Canada the lowest overall tax rate on new business investment in the Group of Seven (G7) by 2011 and the lowest statutory tax rate in the G7 by 2012."
The IMF report goes on to say that flexible labour markets have helped make Canada's adjustment to the volatile dollar "remarkably smooth." The report says that "employment gains in services, construction, and mining as well as interprovincial migration have more than offset manufacturing job losses in the central provinces."
The IMF report also commends the Bank of Canada's actions in response to risks in financial markets, in tandem with other central banks, to provide liquidity to ease global financial turbulence. It also acknowledges the Government's efforts to encourage an orderly restructuring of third-party asset-backed commercial paper.
A copy of the IMF statement is available on the Department of Finance website. The IMF will release its full report on Canada early next year.
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Office of the Minister of Finance
Department of Finance
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