Some of the world’s top economic policy thinkers say it’s time to batten down the hatches for the incoming global slowdown, and they have some pointed advice for countries to best prepare.

It’s advice Canada could benefit from, slump or no slump.

The Organization for Economic Cooperation and Development says the world economy will only grow 2.9 per cent this year and next — the poorest performance since the global financial crisis of a decade ago. For Canada, the OECD sees growth stumbling along at about 1.6 per cent.

Those low growth rates will be here to stay, along with the inevitable decline in living standards, unless developed countries take some “urgent” and “bold actions” to confront the underlying cause of the deterioration: a reluctance to invest because of uncertainty surrounding the effects of climate change, automation and protectionism. For Canada those marching orders suggest economic stimulus, but not in the traditional bricks-and-mortar spending on roads and bridges. The new-economy stimulus could come in the form of ramping up government support for clean energy, weaning ourselves off our dependence on the revenues that flow from fossil fuels, and preparing a plan for the thousands of workers whose jobs will change or disappear because of automation.

“China is transforming its economic model. Digitalization is shifting the way firms operate. And climate change presents daunting challenges,” says the OECD’s chief economist, Laurence Boone.

“These are worrying times.”

The OECD is calling for “decisive, co-ordinated action” that sees governments taking advantage of low interest rates to borrow money and put it to careful, productive use that will stand the test of time, mainly by investing in cleaning up energy and incorporating digitalization into how our economies work.

The good news is: the OECD and Canada’s own economic authorities are working overtime to understand these two disruptive forces and map out solutions.

The uncomfortable news is: anyone who thinks life will continue as usual is kidding themselves. There will be winners and losers.

While the federal government has done little public thinking — yet — on how to incorporate automation and climate change into its plans for promoting stronger economic growth, the Bank of Canada has started down that road in a substantive way.

Earlier this month, the central bank governor himself penned a major essay on how to grapple with the astounding effects of artificial intelligence, machine learning, big data and the whole bundle of side-effects that he and others call the Fourth Industrial Revolution.

Stephen Poloz says we are in the early stages of that revolution right now, when companies and organizations are choosing to either experiment with or resist the technological advances flying at them, for better or for worse.

If the previous industrial revolutions are any indication, Poloz writes, “workers are displaced, stock markets boom, brand-new jobs are created, prices and inflation fall, debt burdens rise and can provoke crises, and stock markets crash.”

In the end, things settle down and we will probably be left with an economy that is more productive than in the past. The transition, though, is harrowing.

He concludes that policy-makers — governments and the central bank — can ease the pain by letting growth run its course and doing what they can to understand and manage the fallout. In other words, instead of throwing sand in the gears of growth, they should be watching for market bubbles, keeping inflation in check and helping displaced workers.

Fair enough, but this digital disruption is happening at the same time as the world is churning to deal with climate change. Trillions of dollars are shifting away from fossil fuels and into cleaner energy production — but not fast enough to hold back warming temperatures and their effects. The implications for Canada’s economy and Canadians’ lifestyles are mind-boggling.

The Bank of Canada has started to do some deep thinking about how to manage this disruption as well. Last week, bank researchers rolled out their initial thoughts on the economic impacts of climate change, raising many questions about how policy-makers should address them.

Oil and gas prices are fluctuating, currencies are in flux, innovation and regulatory requirements are prompting new metrics for investment decisions, and Canada’s patterns of growth are bucking tradition, the paper suggests. Wages, inflation, jobs and the business environment all hang in the balance. And the financial system needs to be able to withstand the onslaught of risk.

Solid research, all of it, but there’s a pressing problem at hand. The bank is only in the early stages of thinking about both these disruptive forces, but the forces are already upon us and Canada’s top economic policy-makers are nowhere close to understanding how these forces interact with each other. At the same time, the OECD’s top thinkers say that government action on both fronts is urgent.

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That’s where some quick and innovative action from the new federal cabinet could come in handy.

A slowdown is in the offing; climate change and automation require bold management and attention; and government help — through smart and generous spending and taxation decisions — to deal with both those forces could also help us weather a global slowdown.

As Boone said: “Everyone must recognize that the time to turn the tide is now.”

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