Is productivity, wealth creation and competition at the forefront of Canada’s growth agenda?

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February 28, 2022 Enterprise, Entrepreneurs, Start-ups, Small Businesses, FinTech and Alternative Finance, Fintech Opinions, Innovation and Resources, Leadership, Productivity, Competition, Stories, Voices No comments

The Globe and Mail | Patrick Brethour | Feb 26, 2022

Canada productivity continues to decline - Is productivity, wealth creation and competition at the forefront of Canada's growth agenda? The Liberals have pointed to the country’s sizzling labour market as proof of their economic management prowess. Canada is indeed a leader among developed countries in creating jobs. But we’re at the back of the pack in creating wealth.

Rising productivity, not jobs, is what will be key to not just outrunning the shadow of the federal debt burden, but in creating the fiscal capacity to deal with climate change, an aging population and a host of other huge challenges in coming decades.

See: Monopoly-Friendly Canada ‘Does Not Treat Competition Policy Seriously’

Ms. Freeland’s fiscal update speech mentioned jobs nine times. Productivity got zero mentions. Competitiveness, just one.

That lopsided emphasis is one warning sign. Another is Canada’s last-place finish in an October study from the Organization for Economic Co-operation and Development on projected growth in per capita gross domestic product from 2020 to 2060 among its 38 member countries.

If the Liberals’ gambit is to pay off, that 50-year slump must end. Canada needs a productivity plan. But so far, the federal government hasn’t produced one. “There’s a lack of ambition, a lack of commitment,” says Scotiabank chief economist Jean-François Perreault.

Former BlackBerry Ltd. chairman and co-CEO Jim Balsillie says: The debate should not be about shifting from resource extraction to factories making gear for the green economy. Canada should not try to compete on labour costs in a world where many other nations can offer much more favourable terms.

See: The Enterprise Automation Imperative—Why Modern Societies Will Need All the Productivity They Can Get

Instead, the focus of policy should be creating conditions for Canadians to invent the next world-beating electric battery, rather than make someone else’s. “The money is owning the idea, and capturing value on that,” he says.

One immediate change he recommends: leverage federal research funding to capture more of the economic value of Canadian innovation. That could be done by requiring that the rights to any intellectual property have to be retained in Canada, so that domestic firms can make use of that technology.

Canadians can either seize the high ground in the increasingly digitized global economy, and reap outsized benefits, or this country will see itself relegated to at best second-tier status.

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