Another checkup on Canada’s business fitness has yielded another warning.
This time the focus is on the economic lifeblood of capital investment that this country, its economy and its standard of living need in order to remain healthy and competitive.
The prognosis is not good.
The Fraser Institute’s Capital Investment in Canada: Recent Behaviour and Implications notes that the growth of that investment is lower than in any period since 1970.
Capital investment is critical to business competitiveness; it is also fundamental to improving labour productivity, another area in which Canada, as the Business Council of British Columbia has noted, is lagging behind its global marketplace competitors.
A comparison between the boom in energy exports from the U.S., now the world’s largest producer of crude oil, versus Canada and its growing inventory of stalled megaprojects, delayed pipelines and dithering on every front provides just one example of where this country is failing to capitalize on its strengths. Canada needs a clear vision for the 21st-century road ahead. It is blessed with resource riches; it is blessed with geographic location next to the world’s biggest economy. But it is cursed with a national inability to leverage its attributes. Global investment is consequently migrating to regions where it has a chance of reaping returns rather than becoming mired in a fog-bound landscape of indecision.
The Fraser Institute report notes that its findings are consistent with concerns raised by other researchers that the business investment climate in Canada is deteriorating, particularly for investment in assets “that are critical to productivity growth.”
The take-away from the drop in Canada’s capital investment is this: we are not guaranteed the good life. Far too many projects have been side-lined by those who don’t know where wealth is generated and consequently how their economic and social safety net is created and maintained.
As long as that continues, the outlook for Canada’s long-term economic health will continue to worsen.