Fraser Institute analysis shows investment is down in 10 of 15 economic sectors
Something needs to be done to address the declining investment in Canada’s businesses.
That’s a key message in a new report from the Fraser Institute which says investment is down in two thirds of the main non-government economic sectors; meaning lower investment in an essential element of raising living standards for Canadians.
“Too often, Canada’s declining business investment is dismissed as a by-product of recent struggles in the oil and gas sector, but in fact there’s been a significant drop in investment across many sectors of the economy,” said Steven Globerman, Fraser Institute Senior Fellow, professor emeritus at Western Washington University and coauthor of Private Sector Capital Expenditures in Canada: An Industry-Level Analysis.
The ten sectors experiencing declining investment – including agriculture, mining, oil and gas extraction, utilities, manufacturing and retail - not only represent a majority of Canada’s private sector industries, but they also accounted for almost two-thirds of private sector investment over the 2014-2017 period (the most recent data available).
The study’s authors found that the drop in investment in that period was the most severe in at least 30 years, including some major recessions.
“Policymakers routinely underestimate how unattractive Canada has become to investors and businesses,” Globerman said. “To begin to reverse this worrying trend, governments across Canada should consider cutting red tape and pursuing a more competitive tax structure to increase competitiveness.”
NEW STUDY: Canada is experiencing a significant loss of investment, and it’s not just in the oil and gas sector.
— The Fraser Institute (@FraserInstitute) July 3, 2019
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