OTTAWA - In a study published by McKinsey Global Institute, William Lewis examined the employee productivity within 13 countries across industries. His results were definitive: productivity was one of the single greatest determinants of gross domestic product per capita. The economy remains the fundamental driving force behind the growth of living standards around the world. Canada is no different.

We were fortunate this past recession. The latest Labour Force Survey data from Statistics Canada has shown that Canada took only 27 months to recover the estimated 400,000 jobs lost in the recession. Earlier recessions in the 80's and 90's required 39 months and 52 months respectively.

Economic downturns are shocking, and are unexpected. Thousands can lose their jobs in what seems like the blink of an eye, as this last recession has shown us. If Canada is to embrace a stable future of steady growth, we need to go further in creating secure, high paying jobs for coming generations. This goal is imperative.

Ken Lewenza of the Canadian Auto Workers once referred to the Harper Government as "the most pro-business government in our (Canada's) history." Canadians consistently poll that the Conservatives remain the most trusted party for job creation and economic management.  Efforts to lower corporate tax rates are indicative of this status.

But this should only be one part of a broader theme. The Conservative Party should distinguish itself in the area of economic policy by undergoing an innovative new long term goal.

Ottawa must launch a Pan-Canadian Competitiveness Strategy.

In 2007, the Government of Canada struck a Competition Policy Review Panel. Tasked with evaluating the state of Canada's competitiveness in the international arena, the Panel published its "Compete to Win" report in 2008. Many of the core recommendations of that Panel should be implemented to make Canada the number one destination for investment in the post-Recession global economy.

Our economic success is coupled with numerous challenges. In 1970, Canada's share of the world's foreign direct investment stock was 16 percent. In 2006, it was around 3 percent. In terms of the relationship between Canadian gross domestic product and foreign direct investment, Canada has seen the largest decline in the past 3 decades of all OECD countries. The majority of our own foreign investment continues to be embedded within the United States. While this remains feasible in the short term, long term prospects for solid quarterly growth will demand that Canada incentivise investment in new economic powers the way we have done with the United States. Simultaneous to this challenge is a trend since 9/11 of "walling" the border, adding new regulations and increasing the expense for Canadian firms exporting to American markets.

The Canadian economy continues to be structured as one of small and medium-sized enterprises. Regulatory rules within Canada continue to make it difficult for a native firm to penetrate foreign markets without merging with a company from outside the country.

Canadian productivity remains a laggard when compared to the US market, and is a laggard in terms of innovative business practices and technological development. Canada is an importer of new ideas rather than an exporter. Our lack of productivity and innovation has led to a weak growth in personal earnings over the last several decades.

These statistics paint a grey picture of Canada's economic future, but readers should not be distraught. Canada remains one of the best positioned countries leaving the recession. Our most controversial political issues are tax cuts and fighter jets, and this is a sign of the stability of our politics. This stability means we are well positioned to concentrate our energies on building a high performing new economy.

So what should a federal competition strategy look like?

Foreign Affairs

1. Canada must move to seek reasonable regulatory harmony with the US. Heavier regulatory burdens in Canada lead to higher prices for Canadian consumers when compared to their American counterparts. Such regulatory differences amount to trade barriers.

Provincial Relations

2. Ottawa should move to negotiate a comprehensive inter-provincial free trade agreement. Few Canadians are aware that our provinces have a protectionist attitude towards one another. A movement to allow for the easier flow of capital within Canada will empower our ability to invest abroad.

3. Ottawa and the provinces must harmonize their reduction of not only corporate taxes, but taxes on business investment. These represent some of the worst barriers to new capital investment facing Canadian businesses.

4. The provinces must totally phase out their capital taxes. These taxes represent a heavy investment burden at the national level.

Education

5. One of Canada's greatest strengths is its high quality education. Despite our successes, there is still room for improvement. Provinces should move to implement the Alberta model of primary and secondary education. Private schools should be given more regulatory leeway to compete with their public counterparts.

6. Reforms must be made across the provinces to the education financing system. Specifically, public money for our schools must follow the students. Students and parents should have choice in what schools they attend, and schools must be willing to diversify their education programming and compete with one another to allow for new specialty programs to emerge for students seeking a particular educational experience.

Legislative Reform

7. Some complain that the 1985 Investment Canada Act is protectionist, in particular its clauses demanding that foreign acquisitions provide a "net benefit" to Canada. These complaints are somewhat exaggerated: an acquisition has been disallowed only twice under that clause. Still, as recent events around the BNP Potash bid have shown us, there is a need to reform the ICA to clarify the definition of a "net benefit". This is vital for Canada's status as a friendly home for foreign investment. The undue risk of an undefined threshold of "net benefit" harms the incentive for foreign firms to invest in Canada.

8. The National Security Review of Investments Regulations should remain in place. While foreign investment is good, investment that benefits terrorist organizations is undoubtably not. The Ministry of Industry should continuously review these regulations to ensure that Canada's enemies remain unable to benefit from our economic success.

9. As advised in the 2008 "Compete to Win" Report, the ICA review threshold should be raised to $1 billion. Currently, the Minister of Industry has the right to review a merger under the "net benefit" clause when it is valued at $500 million.

10.  Legislation regulating telecommunications and restricting foreign ownership of the telecommunications market should be aggressively curbed. Canada's high prices in this industry could be reduced if only our government was willing to allow the market to fulfill its role.

These are only a few steps towards a sleek, new competitive Canada. The need for reform abounds in Canada, and much work is needed, including the political will to make it happen. In the end, a strategy of new competition policy will help secure Canada’s economic health well into the future. We are already a beacon of the free market in the world today: let's go to work and finish the job.