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OECD Economic Survey of Canada 2012

OECD Economic Survey of Canada 2012. Peter Jarrett and Alexandra Bibbee June 14, 2012. Macroeconomic developments and policies. Real GDP growth Quarter-on-quarter, annual rate, %. Economic slack is diminishing. Inflationary pressures are emerging. Year on year growth, in per cent. g.

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OECD Economic Survey of Canada 2012

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  1. OECD Economic Survey of Canada 2012 Peter Jarrett and Alexandra Bibbee June 14, 2012

  2. Macroeconomic developments and policies

  3. Real GDP growthQuarter-on-quarter, annual rate, %

  4. Economic slack is diminishing

  5. Inflationary pressures are emerging Year on year growth, in per cent g

  6. Currency strength is weighing on exports Canadian-US dollar exchange rate, and ratio

  7. The share of manufacturing in real GDP Canada versus the United States

  8. The share of manufacturing in total employment Canada versus the United States

  9. The shifting pattern of real per capita income As a share of the national average

  10. Short-term projectionsAnnual percentage change, volume (chained 2002 CAD)

  11. Short-term projections (continued)Annual percentage change, volume (chained 2002 CAD) 1. As a percentage of GDP.

  12. Households’ indebtedness indicators

  13. Debt-to-disposable income ratios, 2010

  14. Residential investment as a share of GDP

  15. Nominal house pricesIndex, 2000 q1 = 100

  16. House price to income ratioIndex, 2000 = 100

  17. House price to rent ratioIndex, 2000 = 100

  18. Mortgage service ratio and long-term averagePer cent 1. The proportion of the average personal disposable income per worker that goes towards mortgage payments on a quarterly basis based on current house prices and mortgage rates.

  19. Unoccupied housing completionsShare of total completions by type

  20. Monetary and financial policy recommendations • Maintain the current official rate for now (and cut them further if a crisis ensues) • If downside risks avoided, start removing stimulus in the fall and continue through 2013 (125 basis points) • Follow through on macroprudential moves, especially having CMHC supervised by OSFI • Implement as comprehensive a securities market regulator as possible

  21. Net debt as % of GDP

  22. Share of market-based income inequality offset by the tax and transfer system

  23. Health care expense indicators 1. CIHI projections.

  24. Population 65 years of age and overPercentage of total

  25. Fiscal policy recommendations • Implement consolidation plans as budgeted, but slow it if prospects weaken significantly • Implement rise in pension age as planned • Eliminate inefficient tax expenditures, especially those that are regressive • Adopt a target long-term public debt ratio

  26. Unleashing business innovation The Canadian puzzle Innovation drivers Policy solutions

  27. Economic Performance of Canada relative to the United StatesTotal economy

  28. Research and development expenditureAs a percentage of GDP

  29. ICT investment in Canada relative to USAUSA = 100

  30. Science and innovation profile of Canada2010 or latest available year

  31. Intangible investments, selected OECD countries Business sector, as a per cent of GDP

  32. Share of high technology manufacturing in GDP2009 or latest available year

  33. Business R&D intensity and natural resource intensity2000 to latest available year

  34. Product and labour market regulation indicatorsIndex scale of 0-6 from least to most restrictive

  35. Educational attainment of managers and workersBachelor degree and higher

  36. Fiscal support for business R&D investment 2009As a percentage of GDP

  37. Tax subsidy rate on investment in R&D 2009, percentage

  38. VC funding sources in Canada and the United States2011

  39. Recommendations for enhancing innovation • General framework conditions • Open network industries (especially telecoms) and implement Ch. 7 (on labour mobility) of the AIT • Clarify FDI net benefit test and apply it narrowly • Encourage entrepreneurship/risk taking/culture of commerce • R&D support policies • Lower small CCPC rate toward large firm rate and reinstate capital costs in eligible base; use SR&ED savings to boost direct grants • Subject IRAP and other R&D support to rigorous cost/benefit analysis • Carefully design VC support, e.g. as temporary co-financing arrangements with private partners, giving them full management control • Technology transfer • Promote academic-business knowledge sharing • Provide IP (patenting) support to small business

  40. Tertiary education Developing skills for innovation and long-term growth

  41. Unemployment rate by education levelPer cent

  42. Productivity and university attainment across provinces

  43. Relative earnings of 25-64 year-olds with tertiary education, 2009Upper secondary and post-secondary non-tertiary education = 100

  44. Earnings premium and employment rate relative to high school graduatesPer cent

  45. Employment of tertiary graduates by skill level

  46. Population with tertiary education, 2009Percentage of the population age group

  47. Participation rates in university and collegeBy family income among 18 to 24 year-olds, per cent

  48. Tertiary participation by parental educationAmong 18 to 24 year-olds, per cent

  49. Master’s and PhD graduation rates, 2009Sum of graduation rates for single year of age Note that the OECD’s use of the term ""graduation rate"" does not correspond to the concept of a graduation rate used by provincial and territorial governments in Canada. OECD uses the term ""graduation rate"" to refer to the number of graduates (of any age) as a share of the population at the typical age of graduation. This is how the term is used in this report. This should not be confused with what OECD calls a ""completion rate"", and what in Canada is more commonly referred to as a graduation rate, which reports on what percentage of a group of students starting a program have completed it (or graduated) within a certain time frame.

  50. Share of university graduates by field2009

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