With Canada hosting the G7 this year, our country has a unique opportunity to shape the international priorities for some of the world’s largest economies. Although the media focus is primarily on the Leaders’ Summit and ministerial meetings, there is a wider community of stakeholders seeking to influence decisions made at the top levels.
This past April, the Canadian Chamber of Commerce hosted the Business-7 (B7) Summit in Quebec City, which brought together the business federations from G7 countries. The event provided an opportunity to convene some of the world’s top business leaders to exchange views and deliver a business community consensus on how the G7 governments can support economic growth. At this year’s B7, we heard from the prime minister, the ministers of finance, international trade, social development and small business. This high-level attendance underscores the importance Canada’s politicians place on the B7’s recommendations.
The B7’s three priorities this year were inclusive growth, resource efficiency and scaling up small business. Although we normally view these issues from a solely Canadian perspective, it is striking how similar the challenges we face are to those of other G7 countries. In many respects, these shared challenges make fostering consensus easier for business groups than it is for other international institutions.
Each of the three themes is worth explaining to see how the B7 approached the issues this year.
Inclusive growth is a topic of increasing importance for governments around the world. The continued growth of the global economy will require more people participating in the economic prosperity created, as well as ensuring international institutions can adapt to address people’s concerns. For this reason, the B7 emphasized the importance of inclusive growth and urged G7 leaders to commit to opening markets and supporting broad participation within them. This is fundamentally about ensuring economic opportunities are open to all elements of the workforce. To get us there, the B7 emphasized that our economic policies need to stimulate productivity through international trade, open opportunities for the private sector to support diverse sectors and populations, stimulate innovation, promote investment, strengthen education and create opportunities for lifelong learning.
Set against the current global political backdrop, underlining the commitment to global trade and investment was particularly salient. At a macro level, the G7 must take a firm stance against protectionism and support the rules-based global trading system. Crucial to this is ensuring a robust and effective dispute-settlement mechanism, and the G7 must lead by example to eliminate trade-distorting measures.
The B7 also focused on a wide range of digital-economy issues. It recognized the substantial benefits we could reap from the pivot to a digital economy, particularly with the deployment of artificial intelligence, digitization of government services and cross-border data flows. However, these technologies present challenges. Cybersecurity and information technology infrastructure are vital to a functioning digital economy, and also vital in order to instil confidence that new technologies should be adopted. Businesses also need reassurances that their investments will be protected. With respect to artificial intelligence, our countries need a nimble regulatory environment, as well as labour-market policies that will be responsive to the inevitable significant disruptions that will impact workers in many sectors. Lastly, data flows across borders present a notable opportunity to increase business efficiency. Yet, as recent events with technology companies show, we need strong measures to protect the privacy of personal information against business needs, such as prohibiting forced data localizations.
Resource efficiency was selected as a priority for the B7 this year, given the importance of using natural resources in a manner that protects the environment and is sustainable. Since the founding of the G7 Resource Efficiency Alliance in 2015, resource efficiency has become a fixture at G7 gatherings — and a priority for the B7 — because of the crucial role business plays as a driver of innovation and global value chains.
Public and private research, development and innovation strategies are essential for resource efficiency. G7 countries have done an excellent job of working through global programs, but governments need to continually work to create environments that encourage private sector investment. This will help mobilize capital and more effectively leverage public-sector funds.
Resource efficiency closely connects to the B7’s discussions on international trade. Multilateral and plurilateral initiatives to reduce tariffs and non-tariff barriers, and to enhance transparency, facilitate the global spread of modern, affordable and efficient technology. This, in turn, will enable environmentally sustainable economies.
Scaling up small business was designated a theme for the B7 this year given that small- and medium-sized enterprises (SMEs) account for 50 per cent of GDP and 56 per cent of employment in G7 countries. Consequently, the international economy benefits enormously when governments provide tools that not only support, but also scale up SMEs to grow into larger globally competitive enterprises.
Chief among the measures G7 governments can undertake to support SMEs is ensuring a proportionate tax and regulatory burden that does not stifle growth and innovation. These are goals we advocate for on behalf of all businesses, but the challenges faced by SMEs are acute given the realities of their capacity limitations.
Governments can also support the growth of SMEs on a number of other fronts. This includes encouraging them to adopt digital technologies, improving their ability to access international business opportunities and ensuring procurement contracts are accessible.
Lastly, promoting the growth of SMEs owned by women is an opportunity for economic expansion. In Canada, women own 17 per cent of firms with fewer than five employees, but just seven per cent of those with more than 100. G7 governments should support these businesses and their potential economic contribution. The key challenge for women is access to funding. While funding sources may be available, women are turned down more often than men when seeking capital for their businesses. G7 countries should ensure that women have the ability to create, grow and scale their businesses.
Bold and aspirational leadership in government and business has always been critically important during times of great uncertainty. My organization, and our sister business federations in the B7, eagerly await the outcome of the Canadian presidency of the G7 and stand ready to work with government to deliver increased global prosperity.
Perrin Beatty is president and CEO of the Canadian Chamber of Commerce.