Who would have thought Canada could fall so far behind in productivity? Many experts warned of these trends and the potential risks years ago. The current productivity stagnation was preventable; it’s as though Canada is stuck in time. Growth halted years ago, and now Canada faces a situation of declining productivity.
The Canadian Chamber of Commerce maintains a page exclusively discussing the productivity problem. https://chamber.ca/policy-matters-canadas-productivity-problem/ The main factors are:
lack of competition
regulatory complexity
skilled labour shortages
nationally weak investment environment
The point we like to bring up the most is: increasing R&D investments.
Investing in R&D is essential for attracting, developing, and retaining talent, while driving the innovation that keeps Canada competitive in the global market. With robust research and development investment, companies and countries can sustain economic growth and progress. Canada has an opportunity to build a strong R&D ecosystem that supports talent and technology, empowering us to address urgent issues and capitalize on new growth opportunities.
Since 2001, Canada's investments in R&D have steadily declined. Already in 2018, Canada would have needed to "more than double expenditures to achieve an R&D intensity comparable to that of leading countries". Canada is now well below the OECD average and is simply not leading with R&D... innovation! (Reference: Competing in a Global Innovation Economy: The Current State of R&D in Canada, Expert Panel on the State of Science and Technology and Industrial Research and Development in Canada, 2018). It started as Canada being one of few OECD countries with virtually no growth in total national R&D expenditures to... Canada with a decreasing productivity... to a Canada with a decreasing GDP per capita. The next foreseeable step is a decrease in real GDP for the country as a whole. If the alarm bells haven't made the public aware of the situation then, what would it take to make it change course now or in the future? There are solutions, we just need to act and implement them.
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