Canada underwhelms on global competitiveness

Canada places 12th in the World Economic Forum’s latest global competitiveness report—down two places from last year. To move up the rankings will require specific investment by the federal government, suggests a report by National Bank.

The U.S. holds the top spot, followed by Singapore and Germany.

“Compared to the U.S.—our main export market and the home of our main competitor—Canada doesn’t fare very well,” says senior economist Krishen Rangasamy in the National Bank report.

As part of the solution, the feds could increase investment in research and development. The global competitiveness report says Canada spends only 1.6% of GDP on R&D, below the average of 2% among countries in the Organization for Economic Cooperation and Development.

The competitiveness report also notes that Canada’s adoption of information and communications technology is low—the weakest aspect of Canada’s performance measured by the report’s index.

Infrastructure spending is also lacking, accounting for only 4% of last year’s GDP, says the National Bank report.

The feds could also lower trade barriers and more aggressively court skilled foreign workers, says the bank. Labour shortages and available skills often mismatch. “There must be a way of better integrating immigrants, perhaps by facilitating training and recognizing foreign qualifications,” says Rangasamy in the report.

As Canadian businesses struggle to compete with U.S. firms that have benefited from tax reform, the federal government’s fall economic statement will be the most anticipated in years, he adds.

Read: Feds face calls for lower taxes to improve competitiveness

For more details, read the global competitiveness report and the National Bank report.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.