Policy Performance


Economic Policies

Showing considerable progress in recent years, Canada’s market-oriented policy regime receives high rankings in international comparison (rank 9). Its score on this measure has gained 0.3 points since 2014.

Growth has averaged around 2% for several years, driven in part by government infrastructural spending and other stimulus measures. Deficits have been smaller than projected in recent years. The federal debt is expected to fall below a targeted 31.8% of GDP within five years. However, household debt levels remain high, and rising health care costs are endangering provincial-level fiscal sustainability.

The official unemployment rate has reached a 40-year low. Employment rates remain a concern particularly among the indigenous population. Skills shortages and U.S. market access are deemed problematic, but the labor market is flexible overall.

Despite income-tax progressivity, inequality has risen in recent decades. Corporate taxes have been reduced in recent years. A refundable tax credit for low-income workers was introduced in 2018, and capital taxes have largely been eliminated. Research output is good, but investment levels trail the world average.

Social Policies

Featuring high-quality education at all levels and a generally well-performing, universally available health care system, Canada’s social policies fall into the top ranks in international comparison (rank 6). Its score in this area has gained 0.2 points relative to 2014.

Redistributive policies reduce income inequality and support inclusion, although recent immigrants and indigenous communities are somewhat marginalized. A new poverty-reduction strategy is being implemented. Education quality is high, with impressive equity in access. A funding program aimed at closing the educational gap between indigenous and non-indigenous communities is underway.

The labor-force participation rate for women with children is high. Child-benefit levels have been increased. There is no universal child care system, and the net cost of child care is very high. The pension system is relatively effective at reducing poverty among the elderly. High-quality health care is provided for the entire population, though waits for health procedures are a problem.

While crime rates are low, violence against indigenous women is a serious problem, with initial efforts to address the issue having drawn criticism. The government is generous in terms of accepting immigrants, refugees and asylum seekers.

Environmental Policies

With a few blemishes on a generally strong environmental record, the country falls into the middle ranks worldwide (rank 21) on this issue. Its score in this area has improved by 1.7 points relative to 2014.

The country ratified the Paris climate agreement in 2016, setting strong national emissions-reduction targets. Renewable-energy policy is largely a provincial policy area, with some making significant strides. However, climate-change adaption efforts are underdeveloped, and biodiversity in the country’s forests and waterways is on the decline.

Other environmental policies have also been strengthened, including bills to ban large oil tankers from northern British Columbia ports, and another to create a network of protected marine areas. However, the government has also approved the construction of major oil pipelines, and even purchased one that appeared threatened.

A new policy imposes carbon taxes in provinces that lack such a mechanism. Internationally, the government is committing funds to help developing countries address climate change, and contributing to green-technology development.



Quality of Democracy

Canada’s democracy is robust, with a fair, open and transparent electoral process, and thus scores well in international comparison (rank 11). Its score in this area has improved by 0.2 points since 2014.

Civil rights and political liberties are well protected. While anti-discrimination laws are broad and proactive, the indigenous community in particular reports persistent problems, and the gender-based pay gap is large. An effort to overhaul national-security laws is underway, with proposals creating a new accountability framework, but allowing security forces to conduct mass surveillance and cyberattacks.

Private-media ownership is strongly concentrated. The government has begun providing financial assistance to traditional media outlets suffering from advertising-revenue losses. A recently implemented process for nominating Supreme Court justices increased transparency by relying on an independent, non-partisan advisory board.

While corruption is minimal by international standards, several recent high-profile cases have emerged. Parties receive individual donations and government funding. Transparency concerns were recently raised by news of top politicians’ “cash-for-access” meetings with donors.



Executive Capacity

Canada’s highly skilled, comparatively powerful government office falls into the top ranks worldwide in terms of executive capacity (rank 6). Its score in this area has improved by 0.2 points relative to 2014.

Planning capacity is robust, though decentralized. Draft bills are vetted by central policy and finance-oriented agencies with highly skilled analysts with sectoral expertise. Aside from environmental projects, laws are not subject to systematic assessment, but RIAs are mandatory for new regulations. Ex post assessment is subject to the same division.

Consultation with external stakeholders is generally robust and wide-ranging, though work with indigenous communities remains uneven. Communication policies, steered by the Prime Minister’s Office, are considerably more open than under the previous government. While many policies have been implemented effectively, auditors have raised serious project-management concerns.

The quality of regulatory enforcement is generally high. While provinces have broad policy discretion, the federal government imposes funding-related standards in areas such as health care and carbon reduction. International engagement has again become a priority.

Executive Accountability

Though legislative and civil-society resources are significant, Canada falls only into the upper-middle ranks (rank 16) with regard to executive accountability. Its score in this area has improved by 0.3 points relative to 2014.

Surveys show citizens’ policy knowledge to be weak in international comparison, with young people showing a particular political-literacy gap. Public broadcasters’ policy coverage is extensive, with news representing a high proportion of content, while private-sector broadcasters are more superficial.

Parliamentary oversight powers are generally strong. Legislators can request audits from the auditor general or analyses from the parliamentary budget officer, although in some cases this latter entity does not have enough data to analyze government programs. A federal privacy commissioner can audit suspected government breaches of the Privacy Act.

Political parties vary strongly with regard to internal decision-making procedures. Proposals by economic associations tend to be sophisticated, taking broad societal concerns into account. Other interest groups offer well-researched but less consistently feasible proposals.
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