BRENDAN McDERMID
Canadians need to make some hard choices to tackle the key structural problems challenging the country's future prosperity, including soaring health-care costs and a tax system that is unfair to lower-income earners, says the head of Toronto-Dominion Bank.
"We have to have a public debate to hash out what public policy will be," Mr. Clark said after a presentation to the Canadian Club of Montreal on Thursday.
Governments must find solutions to the growing pressures of spiralling health-care costs that are threatening spending in other critical areas such as education, the head of North America's sixth-largest bank said in his speech.
Beyond the need to get back to balanced budgets, there is the longer-term issue of finding "a way where the burden of growing health-care costs does not always fall on governments," he said.
But he stopped short of calling for greater private-sector involvement in health-care delivery.
It's up to individual governments to devise the best policy solutions to these critical issues, with broad input from taxpayers, he said after the speech.
There are difficult choices to be made, he added.
"The answer can't be: 'I want [the government]to do all the schools, all the water and all the health and I don't want my taxes to go up,'" he said.
On the lower-income tax issue, Mr. Clark - a former senior federal bureaucrat in the Liberal government of Pierre Trudeau - said in his speech that lower-income Canadians face an unfair system because their marginal tax rates are higher than those of higher-income earners.
The various employment taxes are also too high, he added.
"We should encourage people to work - not discourage them," he told the luncheon audience.
"We should not always assume that fiscal stimulus means more government spending. It could also mean lower taxes for lower-income Canadians."
Canada can also do more to capitalize on its relatively advantageous position coming out of the recession, he said.
"I believe Canada is uniquely positioned to achieve a permanent competitive advantage relative to other countries if we do, in fact, focus on tackling the longer-term issues," he told the audience.
"Canada is in quite a different position than other countries. Our government did not have to bail out its banks. Our consumers didn't see their home equity value collapse.
"We are exiting the recession in good fiscal shape. So my point is, we can and should do better."
A critical element to the recovery is a credible economic plan, he said.
"For people to invest and grow the economy they need to have confidence that the country is heading in the right direction. This requires Canada to put its fiscal house in order sooner than those countries still grappling with the downturn."
He also said after the speech that TD is interested in expanding its role in automobile leasing by making loans available through dealerships rather than in bank branches.
"From the consumer's point of view, they'd like to be able to do it in all the different channels," he told reporters.
"If that's not politically possible, clearly where there is an alignment of dealers, manufacturers and banks it could be made available to the dealer community. That might be a compromise."