By Rob Starr, Content Manager, Big4.com
Disputing decades of speculation that size and sector composition restricts Canada’s productivity performance, Deloitte’s newest report shows that the real drag on our competitiveness is the inability of Canadian companies to sustain growth over the longer term. The report details several reasons for this, including a reluctance by Canadian companies to invest in growing their business and government policies that encourage companies to remain small.
The Deloitte report found that Canada’s productivity lags the United States in virtually every instance, regardless of a company’s size, sector, business type or location. The gap in competitiveness has widened in mining, oil and gas, and financial services, and has been particularly significant in the manufacturing sector where, since 2000, U.S. productivity has grown six times faster than in Canada. A rare bright spot is the retail sector, where Canadian productivity has outperformed the U.S., largely due to its exposure to the full force of global competition as foreign retailers have aggressively entered the Canadian market.
The new Deloitte report – The Future of Productivity: Clear choices for a competitive Canada – makes it clear that Canadian companies need to be bolder when it comes to investing in productivity-boosting measures and seeking out growth, both within Canada and internationally. In turn, governments must provide the right conditions by eliminating barriers to trade; encouraging competition and foreign direct investment; and adjusting Canada’s immigration system to deal with an aging population and looming skills shortage. Academia can also play an important role in fostering growth by focusing on commercializing research and developing curricula that supports productivity and innovation.