The Financial Post reports on the latest Bennett Jones Economic Outlook and its message that Canada's economy isn't focused enough on investment—a shortcoming that puts the country on a path to fall behind in competitiveness and experience a slow erosion of living standards.
The Outlook says that more competition at home would stimulate stronger investment and position Canadian firms to win globally, crucial goals in a period of high interest rates, sticky inflation and increasing fragmentation in supply chains and trade. Protected markets and poor incentives for investment in Canada will do the opposite.
Instead, Canada should tackle improvements to framework policies in areas including competition, regulation and taxation, focusing on changes that would incentivize innovation and the investment and reinvestment of companies' retained earnings.
At the same time, raising the share of GDP linked to investment should be accomplished through targeted measures that ensure Canada gains a foothold in emerging critical industries including digital and clean tech and technologies such as electric vehicles. Such a strategy would both accelerate productivity growth and position Canada to compete globally on the path to a clean economy.
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