March 12, 2018
London, United Kingdom
Equality and Growth: For a Strong Global Economy
Speech by the Honourable Bill Morneau, Minister of Finance
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Thank you, Lord Mayor, for your kind words. And thank you to the City of London for organizing this event. It's always great to be back here, the home of my alma mater, the London School of Economics.
It's even better to be back when you have good news to share!
In my first speech here as Canada's Finance Minister in 2016, I told you about our plan to help middle-income earners.
We raised taxes on the wealthiest one per cent so that we could introduce a tax cut for individuals in the middle incomes, and those striving to raise their standard of living through hard work.
We also made Canada's system of child benefits more generous and better targeted to those who need them most.
Our plan is working.
In the last two years, the Canadian economy created almost 600,000 jobs, most of them full-time. That's the equivalent of one million jobs in a country with the population the size of the United Kingdom.
Our unemployment rate is near its lowest level in 40 years. Since 2016 we have led the Group of Seven (G7) in economic growth, as we make steady improvements to our public finances.
Our federal debt-to-GDP (gross domestic product) ratio remains firmly on a downward track. And Canada's net debt-to-GDP ratio is the lowest among G7 countries.
Our deficit-to-GDP ratio is projected to reach a low 0.5 per cent.
In other words, Canada's fiscal house is in order, which means that we are resilient to shocks and uncertainty.
But while the Canadian economy is doing great, we know we cannot rest on our laurels.
For the first time in our history, there are now more Canadians aged 65 and older than there are people under the age of 15. Who will step in as more and more people leave the workforce?
Canada's future success rests on making sure that every person has an opportunity to work.
One thing we, like all countries, need to address is the chronic underrepresentation of women in the economy.
Canada's Challenge to the World
Some things have changed since I was a student here.
The digital age, for example, has revolutionized the way we live and work.
Serious issues are becoming increasingly real and will have to be overcome: global warming, population aging, and rapid technological changes, to name a few.
Meanwhile, some barriers persist. Years after years.
Barriers to gender equity to begin with. Among Organisation for Economic Co-operation and Development countries, the participation of women in the economy has increased in the last decades, but it remains well below that of men.
This needs to change.
A very brave young woman, Malala Yousafzai, said it best: "We cannot all succeed when half of us are held back."
Which brings me to Canada's message and actions on equality and growth.
Earlier this year, in Davos, Canadian Prime Minister Justin Trudeau issued a challenge to the world's business leaders.
He said that a fundamental shift was needed, and he invited all leaders to ensure that more women are hired, promoted and retained in the workforce.
Not only because it's the right thing to do, but because it's the smart thing to do.
Because women who enter the workforce change it for the better. They represent a major economic driver: research shows that companies with women in leadership positions see stronger financial performance and more innovation.
Let's look at Canada. The Canadian economy—like most developed economies for that matter—owes to women a large part of its recent growth. In the last 40 years, the rising number of women in the Canadian workforce has accounted for about a third of our real growth in GDP per capita.
As I speak, women's participation in the workforce in Canada is the highest among G7 countries. But it's still almost 10 percentage points below the rate for Canadian men.
The gender wage gap is also an issue in Canada, as in many countries.
On an hourly basis, Canadian women earn on average 88 cents for every dollar men earn, even though Canadian women are among the most educated people in the world.
We know we must do better.
The data are unequivocal: increasing gender diversity leads to more growth.
McKinsey Global Institute estimates that taking steps to advance equality for women could add $150 billion to the Canadian economy by 2026.
And a study conducted by one of Canada's major financial institutions—the Royal Bank of Canada—shows that if our country had a completely equal representation of women and men in our workforce, we could increase the size of the economy by 4 per cent.
Four per cent! That's good for everybody!
However, to quote a very eloquent Briton, David Lloyd George, you cannot feed the hungry on statistics.
Action is needed, and Canada is taking action.
Two weeks ago, I tabled our 2018 budget.
It is the next step towards building an equal, competitive, sustainable and fair Canada and investing in the economy of the future.
The budget puts gender at the heart of decision-making.
For example, it includes pay equity legislation in federally regulated industries such as banks and telecommunications. It's simple: equal pay for work of equal value.
But as Prime Minister Trudeau said in Davos, equal pay does not necessarily mean equal opportunity or equal sacrifice. For example, child care duties continue to fall disproportionately to mothers.
Therefore, we are also creating an additional shared parental leave. It will give parents five additional weeks of parental leave if they agree to share that leave, allowing for better parity when it comes to child care, and more flexibility—mainly for women—for returning to work earlier if they choose to.
The measure will also be available to adoptive parents and same-sex partners.
We're also creating a new Women Entrepreneurship Strategy to provide more funding to women entrepreneurs, and we're enhancing our international assistance policy to provide greater support for refugee women and girls, who face increased risks due to their gender.
Advancing women's equality in Canada will drive our economic growth, while boosting the income of Canadian families.
More women in leadership positions won't just grow the economy, create jobs and strengthen communities, it will also lead to innovation and change in the workplace that will benefit everyone.
These are important steps, and we hope other governments will follow our lead.
But governments can't do it alone.
So, today, I am going to issue the same challenge Justin Trudeau issued in Davos: hire more women, promote them, and make sure they keep working for you!
The global economy needs more women on corporate boards. More women entrepreneurs. More women in leadership positions.
As the Canadian Minister of Finance, I sit around a diverse Cabinet table with as many women as men, and I can tell you the diversity of voices and perspectives around that table makes for better government.
Canada is stepping up and calling on the world to do the same. The economy must work for everyone.
Let's build a world built on prosperity, justice, fairness and gender equality, for everyone: girls and boys, women and men, and persons with intersecting identities.
A world where everybody has a chance to fulfill their potential and achieve their dreams.
A world where everyone can succeed and move forward, because no one is held back.
Thank you. I'll be happy to answer your questions.