22.9 C
New York
Monday, July 4, 2022

OECD urges Canada to improve corporate competitiveness

OECD urges Canada to improve corporate competitiveness© Reuters. People take photographs of the Toronto skyline and waterfront before Alphabet Inc, the owner of Google, announced the project “Sidewalk Toronto” in Toronto

OTTAWA (Reuters) – Canada’s economic growth is strong and some housing market vulnerabilities have improved, but trade policy is a big risk to the outlook and the government should reform taxes to boost corporate competitiveness, the OECD said on Monday.

The Paris-based Organisation for Economic Co-operation and Development said while GDP growth is projected to remain robust, with exports underpinned by strong global demand, rising rates will sap some consumer strength.

On the whole, the OECD sees Canada’s economy growing 2.1 percent this year and 2.2 percent in 2019, down from 3.0 percent in 2017, while exports and employment continue to improve and CPI inflation rises to 2.3 percent in 2018 and 2.2 percent in 2019.

The greatest risk in the outlook is trade protectionism, the OECD said, noting that uncertainty around the future of U.S. trade policy may be dampening investment.

It said the termination of the North American Free Trade Agreement would have “a small but material effect” on gross domestic product, with potential losses around 0.5 percent of GDP in the short term and 0.2 percent of GDP in the long term.

The OECD said U.S. corporate tax cuts have hurt Canadian competitiveness, reinforcing the negative hit from NAFTA uncertainty.

“The government should review the tax system to ensure that it remains efficient – raising sufficient revenues to fund public spending without imposing excessive costs on the economy – equitable and supports the competitiveness of the Canadian economy,” the OECD said.

It also said that while income inequality is close to the OECD mean, working-age poverty is well above the OECD average, immigrant labor market integration lags, and there remains a sizeable gender earnings gap.

Still, a series of changes to mortgage rules and other macro-prudential measures have mitigated the risks around a long housing boom, the OECD said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

11,295FansLike
12,893FollowersFollow
751FollowersFollow
- Advertisement -

Latest Articles

Popular Articles