Study
| EST. READ TIME 1 MIN.Weak business investment in technologies compared to the U.S. hindering improvements in living standards
Comparing the Investment Performances of Canada and the United States Over the Past Five Decades
- There has been a growing concern about Canada’s stagnant productivity performance in recent years, including the Bank of Canada’s Senior Deputy Governor, Carolyn Rogers, declaring Canada’s woeful productivity performance an economic emergency.
- Weak business investment, particularly post-2014, has been highlighted by academics, executives, and policy analysts as an important contributor to Canada’s weak productivity performance.
- This study compares capital investment in Canada to that of the US and the OECD over the past five decades to identify how Canada’s recent relative investment performance differs from its relative performance in earlier periods.
- The findings of this study support the claim that a fundamental change took place in Canada’s investment environment post-2000, and particularly post-2014. Specifically, an increasing share of total capital investment went into the construction and renovation of residential dwellings, while a decreasing share went into information and telecommunications equipment and intellectual property products used by businesses. The opposite pattern characterizes investment in the US.
- The declining share of total investment in Canada accounted for by corporate investment, contrasted with an increasing share in the US, is consistent with the US outperforming Canada in the growth of both labour productivity and real per capita GDP in recent years.
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Steven Globerman
Senior Fellow and Addington Chair in Measurement, Fraser Institute
Mr. Steven Globerman is a Senior Fellow and Addington Chair in Measurement at the Fraser Institute. Previously, he held tenuredappointments at Simon Fraser University and York University and has been a visiting professor at the University of California, University of British Columbia, Stockholm School of Economics, Copenhagen School of Business, and the Helsinki School of Economics.He has published more than 200 articles and monographs and is the author of the book The Impacts of 9/11 on Canada-U.S. Trade as well as a textbook on international business management. In the early 1990s, he was responsible for coordinating Fraser Institute research on the North American Free Trade Agreement.In addition, Mr. Globerman has served as a researcher for two Canadian Royal Commissions on the economy as well as a research advisor to Investment Canada on the subject of foreign direct investment. He has also hosted management seminars for policymakers across North America and Asia.Mr. Globerman was a founding member of the Association for Cultural Economics and is currently a member of the American and Canadian Economics Associations, the Academy of International Business, and the Academy of Management.He earned his BA in economics from Brooklyn College, his MA from the University of California, Los Angeles, and his PhD from New York University.… Read more Read Less…
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