- There has been a growing concern about Canadaâs stagnant productivity performance in recent years, including the Bank of Canadaâs Senior Deputy Governor, Carolyn Rogers, declaring Canadaâs 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 Canadaâs 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 Canadaâs 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 Canadaâs 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.
Authors
- Published in
- Canada