Canadian business investment per worker plummeted by 20 per cent over a 15-year stretch, according to new Statistics Canada research that suggests weaker competition is partly to blame.
The report finds for every worker, businesses invested $628.80 less in their companies in 2021 than they did in 2006.
The decline was more significant in large and medium-sized companies and foreign-controlled businesses, though it香蕉视频直播檚 unclear why that was the case.
The report attributes nearly one-third of the drop to declining entry rates, or the number of new companies starting up by industry.
香蕉视频直播淓conomists always believe that competition promotes investment. When you look at our data, there香蕉视频直播檚 a decline in the share of new firms,香蕉视频直播� said Wulong Gu, the study香蕉视频直播檚 author.
Canada is struggling to increase labour productivity amid low business investment, an issue that has been raised frequently by business groups and economists in recent years.
Capital investment, which refers to spending on everything from real estate to machinery, helps businesses grow and make their employees more productive.
That香蕉视频直播檚 why economists argue capital investment is critical to growing the economy and improving living standards.
The report says the slowdown in investment coincided with a shift toward intangible assets such as brand equity and patents, which national statistical agencies don香蕉视频直播檛 record as investments.
However, that shift doesn香蕉视频直播檛 explain why business investment in Canada lags that in other countries, said Wu, because intangible assets are not recorded as investments elsewhere, either.
The study also found no relationship between profitability and business investment, which Wu said was 香蕉视频直播渟urprising.香蕉视频直播�
Canada香蕉视频直播檚 competition watchdog released a report in the fall that found competition weakened over the previous two decades as profits and markups rose.
The Liberal government recently introduced several changes to the Competition Act after pledging to modernize the country香蕉视频直播檚 competition law.
The Competition Bureau welcomed the amendments, which were inspired by its recommendations, but it香蕉视频直播檚 hoping for even more ambitious changes.
In a news conference earlier this month, Finance Minister Chrystia Freeland weighed in on the issue of business investment and made a plea directly to CEOs to spend more on their businesses.
香蕉视频直播淲e believe in you. We want strong Canadian-headquartered companies in this country,香蕉视频直播� Freeland said. 香蕉视频直播淲e need you to be investing in the productive capacity of this country, whatever sector you香蕉视频直播檙e in.香蕉视频直播�
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