The formation and formation of the modern model of economic development of Canada was preceded by a number of historical, political and socio-economic events in the life of the state, which, in turn, predetermined the development strategy of a highly developed state.
The period 1980-1985 can be called The Canadian “Reaganomics”, characterized as the promotion of free enterprise, deregulation, privatization, stimulation of investment and tax reform.
The period 1990-1995 is characterized by the dismantling of the mechanism of state regulation of the economy. A.I. Pogorletsky argues that the following measures can be noted for this period:
1) the federal government transfers to private business large enterprises of industries, air and rail transport, communications;
2) privatization of ports, port facilities, airports, telecommunications is carried out;
3) ensure the penetration of private companies into the social sphere;
4) subsidies for agriculture and transport shall be abolished;
5) the volume of public investment is decreasing;
6) the national economy is opened through a free trade agreement with the United States, Mexico (NAFTA);
7) inflation is contained, the state budget deficit is eliminated, the public debt is reduced;
8) ensures deep penetration of foreign capital into the leading mining and manufacturing industries.
A feature of the current stage of economic development (from 1996 to the present) is the elimination of the state budget deficit and public debt, decentralization of management.
The above actions of the government to improve the economy have led to the following results:
(1) financial stabilization has emerged;
2) eliminated the state budget deficit by introducing a fiscal dividend and increasing individual income taxation and the level of taxation of companies. The tax climate in Canada is less favorable than in the United States. Direct payroll taxes are 46% in Canada and less than 30% in the U.S. Nevertheless, the population benefits from high taxes in the form of free health care and low-cost higher education;
3) there was a noticeable expansion of foreign trade.
The result of reforms in the Canadian economy, carried out from the middle
The 1980s saw its general recovery and significant improvement in public finances. The main achievements of the reforms are as follows:
– there was a denationalization of the economy;
– direct subsidies in agriculture and transport have been eliminated;
– the budget deficit in most provinces has been eliminated;
– the state apparatus has been reduced;
– new progressive sectors of the economy have been created;
– the number of people employed in private business has been increased.
Despite the notable successes achieved, one of the unresolved problems remains the problem of achieving social harmony and consolidating society.
According to A.I. Pogorletsky, the model of economic development of Canada can be called as “an export-oriented economy, due to a narrow domestic market and a huge state potential.”