According to a new report by the Conference Board of Canada, the nation has slipped in the global ranking for innovation, falling back three spots compared to last year.
The report ranks countries’ innovation capability according to public spending levels, research and development, access to capital, and other metrics. It placed Canada 12th out of 16 countries.
Canada’s overall C grade this year is higher than its previous score of D, but the Board cautioned that the improvement was “precarious” due to “persistent weaknesses and lagging investment” by private businesses.
The Conference Board attributed the slide to a stronger performance by Canada’s peers, particularly the U.S. and Switzerland.
Why Does This Matter?
These results make it extremely difficult to accept the federal government argue that the competitiveness of the nation has not dwindled in recent years. While the cumulative grade went up, the total rankings have fallen. And in business almost everything is relative.
With the nation maintaining higher tax levels, stricter regulations, and lacking a clear plan to navigate its complex economy, there is only one likely outcome.
A continuously worsening competitive environment.
Canadian businesses need to make massive new investments to compete within the new economic framework of the 21st century.
Until this moment the Federal government has responded largely by paying for portions of that investment, covering the costs for large-scale corporations such as Toyota by investing $110 million into upgrades, but largely leaving small and mid-scale corporations with far sparser balance sheets to fend for themselves.
In reality, this will have a worsening effect over time, as only larger and larger firms are able to compete within the Canadian market, and only once aid has been provided by one or multiple levels of governments.
This is a bizarre way of handling an economy, but I guess the Prime Minister is finding it harder and harder to make the budget or the economy balance itself.