With the economy stabilizing and some economists even declaring the recession over, many people are starting to share their opinions on what Canada must do during the recovery. Recently, former Ontario Liberal finance minister Greg Sorbara offered his view on the economy in the Ottawa-based Hill Times newspaper and a panel of CEOs, polled by COMPAS Inc., agree with what he thinks are the challenges that lay ahead.
Nearly 90% of the respondents agreed with Sorbara’s assertion that Canadian governments will need to review the services it provides to the public, while 94% of the CEOs said health care is an area of particular concern given the aging population. “The days of our public health care system funded from government (to the degree it currently is) are numbered,” wrote one CEO.
The panelists also contend further defaults on private sector pension commitments are likely and beneficiaries could receive between 70% and 80% of the promised payments.
A further 91% of respondents also agreed with Sorbara that the massive amount of debt governments are accumulating will be difficult to reduce without cutting public services or increasing taxes, although a very slim majority (51%) think taxes will absolutely need to be increased.
The CEOs would prefer governments curb wasteful spending within their own departments first, judging from their comments. “Don’t raise taxes,” wrote one. “Reduce the size of government.”
“There is much government waste that could be cleaned up without the need to reduce services. The bureaucracy needs a good house cleaning first,” another respondent revealed.
Others pointed out we shouldn’t be surprised about the potential need to reduce services and increase taxes. “As we start to come out of the recession, we need to reduce government spending so as not to trigger over-inflation,” wrote one CEO. “This is probably a good time to start talking about government cutbacks, increasing taxes and increasing the money supply. Politically these are all dangerous topics, but if we get started quickly, perhaps the impact can be softened a bit.”