CIBC CEO Asks Government to Work on Making Post-Covid Rally Last
CIBC CEO Asks Government to Work on Making Post-Covid Rally Last
(Bloomberg) -- Canadian Imperial Bank of Commerce Chief Executive Officer Victor Dodig, like many other executives, expects a strong economic rebound coming out of the pandemic. Governments should start working now to make sure it lasts, he said.
Policy makers should focus on shifting their stimulus efforts to driving “long-term growth rather than short-term consumption,” Dodig planned to say in a speech at the bank’s annual meeting Thursday, according to his prepared remarks. In Canada in particular, the government should enact policies that deepen capital pools and allow startups to scale and remain in the country “so that Canadian success stories don’t become exports.”
One such policy that could help that effort would be flow-through shares for technology companies, Dodig said in an interview before the speech. Flow-through shares, traditionally used in extraction industries, are sold to investors at higher prices than regular shares but allow holders to claim tax deductions for portions of the issuing company’s capital or development expenses.
“The government should put in policies that enable private capital and don’t crowd it out,” Dodig said in the interview.
To determine whether the post-pandemic rebound is becoming self-sustaining, Dodig said he’ll be watching metrics like full-time job creation, female participation in the labor force, efforts to retrain workers displaced by new technologies and Canada’s current account balance.
The government also needs to ensure Canadians have affordable housing, but they should wait until some of the shorter-term effects of Covid-19 subside before implementing major changes, he said. Canada’s soaring housing prices are being caused in large part by a lack of supply, which will only be worsened when immigration to the country resumes its former pace after the pandemic, he said.
“That’s going to put even more pressure on housing,” Dodig said. “We need to be both accelerating our housing supply in urban and adjacent suburban areas and building the transportation infrastructure to support that so that people can afford longer term to live in their homes.”
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