Introduction
A central role of government is to improve the well-being of
citizens, and a sustainable economy is essential for achieving this objective.
Improved fiscal and monetary policies have helped create a productive and
competitive economy, driving significant progress in terms of Canada's standard
of living. Canadians must recognize, however, that in order to maintain or
surpass these standards over the long term, a sustainable
approach to the economy, environment, and society is
required. Sustainable
development is commonly defined as development that meets the needs of the
present without compromising the ability of future generations to meet their own
needs. Success depends on the reconciliation of economic growth with
environmental considerations as well as a commitment to foster the development
of human capital.
A sustainable economy includes economic stability and
competitiveness, employment and education, a healthy environment, and sound
environmental practices. Canada's economic well-being depends on such factors as
the following:
- the strength of Canada's industries;
- a well-balanced ecosystem, and the vitality, diversity, and sustainability of natural resources;
- dynamic trade relationships with other nations;
- a highly skilled, healthy, and adaptable workforce;
- the health of the financial and service sectors; and
- the ability to span distances using communications and transportation technologies.
The
Canadian economy is one of the strongest and healthiest among the seven
leading industrial countries of the G-7, which consists of the U.S., the United
Kingdom, France, Germany, Italy, Canada, and Japan. The federal government
recorded its eighth consecutive balanced budget in 2004-05. Between 1997 and
2004, Canada experienced the strongest growth in employment among the G-7
countries. The driving forces behind recent economic developments in Canada are
global in scope, such as rising energy prices, and have contributed to the
appreciation of the Canadian dollar.
Alongside economic priorities, there is consensus that
environmental quality is central to the long-term quality of life of Canadians
and their prosperity. It is critical to the health and sense of well-being of
Canadians, to the livability of Canadian communities, and the legacy conserved
and protected for future generations. Indeed, a competitive economy and a
sustainable environment are complementary goals.
The Government of Canada's role in a sustainable economy
Worldwide there is an increasing recognition that a new model of
competitiveness is emerging-one where environmental sustainability exerts
considerable influence over economic performance and quality of life. With the
aim of enhancing the well-being of Canadians at the heart of its economic,
environmental, and social policies, the government recognizes the need to
fundamentally transform Canada's approach to environmental sustainability-a key
element of a sustainable economy. One way that the government is addressing this
need is through the implementation of a competitiveness and environmental
sustainability framework to better align environmental and economic signals. The
Government of Canada is working with provincial and territorial governments,
industry, Aboriginal organizations, and non-governmental organizations to
develop a shared approach through this framework.
The Government of Canada recognizes that in a sustainable
economy, environmental and economic success go hand-in-hand and are supported by
policies that draw on a variety of innovative tools, including market-based
instruments. At the same time, a sustainable economy must also rely on the
traditional roles and responsibilities of the government, such as preparing the
budget, designing and analyzing tax policies, and creating legislation and
regulations that, for example, protect the rights of workers and regulate
industries.
Financial markets play an important role in allocating resources
to firms with the best investment opportunities. Budget 2005 takes a series of
measures to improve the efficiency of financial markets. With more efficient
financial markets, Canadian investments can earn a higher return and Canadian
businesses can become more competitive globally.
To build a globally competitive economy, the Government of
Canada is dedicated to pursuing its commitment to invest in skilled knowledge
workers, cutting-edge research, science, and innovation. The October 2004 Speech
from the Throne identifies the people of Canada as the nation's greatest source
of creativity and economic strength. The government is committed to supporting
the development of human capital. Budget 2005 announced initiatives that focus
on early learning and child development, literacy, and improving and
accelerating the integration of immigrants into the workforce.
This chapter tracks the Government of Canada's contribution to
five outcomes related to a sustainable economy:
1. sustainable economic growth;
2. an innovative and knowledge-based economy;
3. income security and employment for Canadians;
4. a fair and secure marketplace; and
5. a clean and healthy environment.
Supplemental Information
Economic growth and environmental concerns
Natural, human and social capital
Performance context
To set its programs, expenditures, and performance in context,
the Government of Canada is tracking key measures of long-term progress in the
area of sustainable economic growth. In the electronic version of the report,
clicking on indicators in the Performance Highlight table will lead you to
detailed information about current performance and trends.
Trend |
Indicator |
Performance Highlight |
▲ |
Real gross domestic product (GDP) |
Real GDP increased by 2.9% in 2004, surpassing the 2.0%
recorded in 2003. Within the G-7, Canada had the second fastest growth in
real GDP per capita between 2000 and 2004.
In 2004, five provinces and territories recorded real GDP
growth that was above the national average, most of them in western
Canada. Newfoundland and Labrador was the only province with a decline in
real GDP. |
▬ |
Cost-competitiveness† |
Canada's performance in cost-competitiveness is mixed.
Despite ranking first in the G-7 for cost competitiveness in 2004,
Canada's cost advantage relative to the U.S. declined from 14.5% in 2002 to 9.0% in 2004. |
▬ |
Natural resources sustainability |
In 2004, the status of commercial fish stocks did not
change significantly. Among the 70 stocks assessed, no notable change
occurred as compared with their status from 2001-03. |
▼ |
Climate change |
Canadian greenhouse gas emissions increased by 3.0%
between 2002 and 2003 and by 24.0% since 1990. Furthermore, secondary
energy use increased by 4.0% between 2002 and 2003, and by 22.0% since
1990. |
▲ |
Green economic practices† |
ISO 14001 is an international environmental management
standard. The number of Canadian firms with ISO 14001 certification
increased from 100 in 1999 to 1,484 in 2004, moving Canada from 21st to
12th in world rankings. |
Note: The legend summarizing the symbols used in the table
above can be found in the introduction, on page 2.
The Government of Canada's contribution to sustainable economic growth
By undertaking the right investments and creating favourable
conditions for growth, the government can encourage continued prosperity,
perpetuating the virtuous circle of a robust economy, secure social foundations,
a sustainable environment, and a sound fiscal framework. Each of these elements
strengthens and reinforces the others, leading to, for example, lower interest
rates, increased revenues, reduced taxes, and new social, economic, and
environmental investments.
Sustainable economic growth includes strong regional economies
and sectoral competitiveness balanced with sound environmental practices. Budget
2005 affirms the importance of Canada's regions and sectors, investing in
regional economic development agencies and key sectors, such as agriculture and
space. Reducing regional disparities is a priority, as is creating an attractive
business environment that maximizes the contribution of all sectors to Canada's
standard of living.
Did you know?
According to the GlobeScan 2004 Food Issues Monitor,
an annual syndicated survey of international public opinion on issues of
production and consumption of food, Canadians expressed a high level of
confidence in Canada's food quality and quality standards.
Source: Agriculture and Agri-Food Canada, 2005 |
With a significant number of weather-dependent industries in
Canada, a growing concern is the number of extreme weather events that have had
disastrous ecological and economic costs. Some of these effects foreshadow what
might be expected as the climate changes. Some recent disasters include the 2001
Prairie drought, which resulted in payouts to crop insurance programs exceeding
$1 billion; the Saguenay flood of 1996, which cost the Canadian economy more
than $1 billion in damages; and the 1998 ice storm, the costliest weather event
in Canadian history, with property damage exceeding $5 billion.
Healthy ecosystems are essential to the strength of the economy
in direct ways. Canada's natural resource sectors and ecotourism depend on
healthy forests, agricultural lands, and oceans. Canada's forests contribute
$59.0 billion and its oceans $22.0 billion to the Canadian economy annually.
Compromised ecosystems and inefficient and unsustainable management of natural
resources can have significant economic consequences. Natural resource-based
industries (energy, forestry, minerals, and metals) provide jobs to more than a
million Canadians, and in 2004 there were approximately 324,100 people employed
in agricultural production in Canada. The 1992 collapse of the northern cod
fishery off the coast of Newfoundland resulted in the direct loss of 20,000 jobs
and a further 20,000 being harmed or lost indirectly. Adopting a sustainable
approach to the management of natural resources is a vital strategy for ensuring
the long-term economic viability of natural resources-based industries.
Canada officially ratified the Kyoto
Protocol to the United Nations Framework Convention on Climate Change
(UNFCCC) on December 17, 2002. Under this Protocol, Canada is required to
reduce its greenhouse gas emissions to 6.0 per cent below 1990 levels in the
period from 2008 to 2012. Canada is one of the largest producers of greenhouse
gas emissions on a per capita basis in the world-a situation that results from
its climatic conditions, its large landmass, and the energy-intensive nature of
many of its industries. Project
Green-Moving Forward on Climate Change: A Plan for Honouring our Kyoto Commitment
embodies the Government of Canada's efforts to balance economic and
environmental concerns. The Plan provides for Government of Canada investments
in the order of $10 billion by 2012 to fully realize the anticipated reductions
of about 270 megatons of greenhouse gas emissions.
Several departments, agencies, and Crown corporations contribute
to sustainable economic growth through their respective departmental strategic
outcomes or Crown mission statements. Clicking on the links in the electronic
version of the following table will lead you to planning, performance, and
resource information, which is contained in the organizations' departmental
performance reports and reports on plans and priorities as well as in the Annual
Report to Parliament on Crown Corporations and Other Corporate Interests of
Canada. The Strategic Outcomes Database, which can be found at http://www.tbs-sct.gc.ca/rma/krc/cp-rc_e.asp,
also leads to relevant audits and evaluations.
Government of Canada Outcome |
Federal Organization |
Sustainable economic growth |
Agriculture and Agri-Food Canada
Atlantic Canada Opportunities Agency
Atomic Energy of Canada Limited
Bank of Canada
Business Development Bank of Canada
Canada Deposit Insurance Corporation
Canada Lands Company Limited
Canada Mortgage and Housing Corporation
Canada Pension Plan Investment Board
Canadian Environmental Assessment Agency
Canadian Food Inspection Agency
Canadian Tourism Commission
Cape Breton Development Corporation
Cape Breton Growth Fund Corporation
Citizenship and Immigration Canada
Defence Construction Canada
Department of Finance Canada
Economic Development Agency of Canada for
the Regions of Quebec
Environment Canada
Enterprise Cape Breton Corporation
Farm Credit Canada
Fisheries and Oceans Canada
Human Resources and Skills Development Canada
Indian and Northern Affairs Canada
Industry Canada
Infrastructure Canada
International Trade Canada
National Energy Board
National Round Table on the Environment and the Economy
Natural Resources Canada
Northern Pipeline Agency Canada
Old Port of Montréal Corporation Inc.
Parc Downsview Park Inc.
Parks Canada
Queens Quay West Land Corporation
Ridley Terminals Inc.
Royal Canadian Mint
Transport Canada
Western Economic Diversification Canada |
2005 Climate Change Plan for Canada
The objective of the 2005 Climate Change Plan for Canada
is to transform Canada's economy so the government can honour its Kyoto
commitment and make deep reductions of emissions in the decades ahead
while ensuring continued economic growth. Meeting Canada's Kyoto target
requires a reduction of 270 megatons within the 2008-12 period.
The Plan is the first component of Project Green and
focusses on harnessing market forces, building enduring partnerships with
provinces and territories, and promoting innovation.
The Plan is built on seven major initiatives.
1. Reducing emissions from large industrial sources:
The Large Final Emitter System sets regulated emissions intensity
improvement targets for facilities in the oil and gas, thermal power,
mining, and manufacturing sectors. The system provides flexibility for
companies to achieve their targets, including investing in the
Technology Investment Fund.
2. Reducing emissions from vehicles: An agreement
with automakers will reduce emissions from new vehicles sold in Canada
by 25.0 per cent.
3. Tapping the emission reduction potential in all
sectors of Canada's economy: The offset system will issue credits
for verified reductions across Canada's economy. The Climate Fund will
put a value on these by purchasing credits as well as investing in
internationally recognized emissions reductions where they advance
sustainable development in developing countries.
4. Deploying strategic new technologies (e.g.
clean coal technology) and infrastructure (e.g. the backbone of a
carbon dioxide capture and storage pipeline system): The Partnership
Fund, with provinces and territories, will cost-share these projects as
well as support key national strategies in areas such as energy
conservation.
5. Diversifying Canada's energy sources: Expanded
incentives will increase production of renewable energy and position
Canada's industries in growing international markets.
6. Expanding citizen engagement: The One-Tonne
Challenge and the EnerGuide for Houses Retrofit Incentive will provide
citizens with the tools they need.
7. Leading by example: The government is
committed to making federal operations among the greenest in the world.
While the New Deal for Cities and Communities can be
expected to generate important emission reductions, the magnitude depends
on the conclusion of agreements with provinces and territories and,
therefore, the Plan does not include them.
Canada is hosting the United Nations Climate Conference in
Montreal in the fall of 2005. This is the first United Nations meeting on
climate change since the Kyoto Protocol entered into force, and it will
lay the foundation for discussions on international co-operation to
address climate change over the long term. Climate change is a global
problem that requires a global solution.
|
Supplemental Information
Economic growth
Performance context
To set its programs, expenditures, and performance in context,
the Government of Canada is tracking key measures of long-term progress in the
area of an innovative and knowledge-based economy. In the electronic version of
the report, clicking on indicators in the Performance Highlight table will lead
you to detailed information about current performance and trends.
Trend |
Indicator |
Performance Highlight |
▼ |
Innovation |
Canada's performance in innovation is slightly declining.
Canada's gross domestic expenditure on research and development (GERD) as
a percentage of GDP has decreased from 2.05% in 2001 to 1.89% in 2004. In
terms of other measures of innovation, such as Canada's world share in
triadic patent families and science and engineering article outputs,
Canada is behind the U.S. and other G-7 countries. |
▲ |
Education attainment |
In the last decade, the proportion of Canadians with a
college or university degree increased. In 2001, 61.0% of all Canadians
aged 25 to 34 had at least some education beyond high school. This is a
marked increase over a decade earlier when only 49.0% of people in that
age category had any post-secondary education. |
▬ |
Literacy |
The 2003 data from the Adult Literacy and Life Skills
Survey indicates that the average literacy score for Canadians has not
changed significantly since 1994. |
Note: The legend summarizing the symbols used in the table
above can be found in the introduction, on page 2.
The Government of Canada's contribution to an innovative and knowledge-based
economy
Innovation is a driving force in economic growth, environmental
sustainability, and social development. It is an integral element that helps us
to deal with and prepare for challenges such as climate change. In today's
knowledge-based economy, education plays a key role in providing individuals
with the knowledge, skills, and competencies to participate effectively in
society and the economy (OECD, Education
at a Glance 2004). Innovation through new knowledge has become the main
source of competitive advantage in all sectors of economic activity and is
closely associated with increased exports, productivity growth, and the creation
of new firms. Recognizing this, the government committed to making significant
strategic investments in building a world-class research environment in Canada
in Budget 2005.
The federal government launched Canada's
Innovation Strategy in 2002, a 10-year plan to help make Canada one of the
world's most innovative countries. In collaboration with provincial and
territorial jurisdictions, universities, communities, and citizens, the
government is working to make Canada a world leader in developing and applying
ground-breaking technologies, creating and commercializing new knowledge,
promoting continuous learning, training skilled workers, and ensuring a strong
and competitive business environment. Budget 2005 reaffirms these previous
budget commitments, which invested in the Canada Foundation for Innovation, the
Social Sciences and Humanities Research Council of Canada, and Genome Canada. As
well, in Budget 2005 the Government of Canada committed to investing $125.0
million over the next three years to move forward on the Workplace Skills
Strategy to help workers keep pace with changing requirements.
Did you know?
The Government of Canada has won recognition for the fifth
consecutive year as the world's best in providing on-line services to its
citizens. Accenture-a global management consulting, technology services,
and outsourcing company-cited Canada's expertise in its annual
international report on e-government. The government's commitment to
consulting Canadians and collaborating with federal departments and other
levels of government was noted as a key factor to Canada's overall
success.
Source: Public
Works and Government Services Canada, Achievements, 2004 |
Several departments, agencies, and Crown corporations contribute
to an innovative and knowledge-based economy through their respective
departmental strategic outcomes or Crown mission statements. Clicking on the
links in the electronic version of the following table will lead you to
planning, performance, and resource information, which is contained in the
organizations' departmental performance reports and reports on plans and
priorities as well as in the Annual Report to Parliament on Crown
Corporations and Other Corporate Interests of Canada. The Strategic Outcomes
Database, which can be found at http://www.tbs-sct.gc.ca/rma/krc/cp-rc_e.asp,
also leads to relevant audits and evaluations.
Government of Canada Outcome |
Federal Organization |
An innovative and knowledge-based economy |
Agriculture and Agri-food Canada
Atlantic Canada Opportunities Agency
Atomic Energy of Canada Limited
Business Development Bank of Canada
Canada Council for the Arts
Canada Pension Plan Investment Board
Canadian Grain Commission
Canadian Heritage
Canadian Institutes of Health Research
Canadian Space Agency
Citizenship and Immigration Canada
Environment Canada
Fisheries and Oceans Canada
Foreign Affairs Canada
Human Resources and Skills Development Canada
Industry Canada
Infrastructure Canada
International Trade Canada
National Defence
National Research Council Canada
Natural Resources Canada
Science and Engineering Research Canada
Social Development Canada
Social Sciences and Humanities Research Council
of Canada
Transport Canada
Western Economic Diversification Canada |
|