CIBC Chief Executive Officer Victor Dodig is rebuking the rising trend of protectionism and suspicious view of free trade seen both in the wake of the U.S. election and the U.K. vote to leave the Eurozone. In a speech delivered in Toronto Thursday, Dodig warned Canada is not an island unto itself, and will acutely experience negative ramifications if trade barriers are erected.
“The population is questioning the status quo, both on the right and the left: ‘I used to be able to work hard and benefit, why can’t that be the same thing today?’ My answer to that is, the world has changed,” Dodig said. “For us, as Canadians, we need to recognize that these risks are very real, and we choose to ignore them at our peril.”
Dodig urged Canadian companies to move up the value chain in terms of both goods and services produced, and should endeavor to increase their global trading footprint.
“We need to grow a fourth pillar of the Canadian economy, based on a diversified spectrum of higher value-added goods, and importantly, value-added services,” he said, according to remarks prepared for delivery. “It’s the jobs we create in this fourth pillar that are going to help Canada win the day, because they’re the right type of jobs to give us a competitive edge globally.”
Dodig’s recommendation mirrors those made by Finance Minister Bill Morneau’s top economic advisor, Dominic Barton, who has actively argued a large amount of future growth will be driven by domestic innovation.
Dodig highlighted Statistics Canada data showing innovative companies engage in more trade than their traditional counterparts, but stressed “innovative” is not merely a synonym for a technology company.
“We also need a much broader adoption of innovative practices across all sectors,” he said. “From financial services to natural resources. From agriculture to manufacturing. It has to be across the board.”
Dodig said he believes Canada should remain committed to its economic relationship with the United States, but should work to open new trade agreements elsewhere.
“For Canada’s economy to grow and succeed, we must be unwavering in our commitment to open trade, and to open borders,” he said. “To the free flow of goods, to the free flow of services, and to the free flow of people.”
“The principle of openness is at the core of who we are as a nation, and is central to our continued success as a major advanced economy.”