Per-worker business investment down 20% since 2014 and falling further behind U.S.

Comparing Business Investment per Worker in Canada and the United States, 2002–2021

• Economists have warned of Canada’s weak business investment, particularly compared to the United States. This should concern Canadians as strong busi­ness investment is key to higher incomes, greater economic prosperity, and improved living standards.
• Real ($2012) non-residential business investment per worker in the United States exceeded that of Canada in every year from 2002 to 2021: Canada’s business investment grew by $2,889 per worker from $11,798 to $14,687 while US investment grew by $11,064 per worker from $15,686 to $26,751.
• The gap between Canada and the United States increased significantly after 2014 as real business investment began to decline in Canada. In 2014, Canada invested about 79 cents per worker for every dollar invested in the United States; in 2021, investment was 55 cents for every US dollar.
• In 2014, three Canadian provinces had significantly higher real business investment per worker than the United States ($23,333): Alberta ($52,533), Newfoundland & Labrador ($48,867), and Saskatchewan ($44,699). From 2014 to 2021, however, US growth in real business investment per worker was higher than growth in any Canadian province except Ontario. In fact, growth declined in five provinces: Alberta, Newfoundland & Labrador, Saskatchewan, Manitoba, and Nova Scotia. By 2021, real US business investment per worker ($26,751) exceeded that of any Canadian province.
• Canadian prosperity depends in large part on the strength of business investment. Policy makers must recognize the current challenge, understand its causes, and prioritize policies that support business investment moving forward.