Ottawa, ON — The current crisis of confidence in the financial system and the global growth slowdown will pass, says the Conference Board of Canada. The fundamentals of the economy — including productivity growth and the need for foreign direct investment — still matter, and are highlighted in the Conference Board’s Report Card on Canada.
In the Board’s latest report card on the economy — which now includes details and analysis — Canada gets a B grade and ranks 11th out of 17 countries.
“The two areas of concern in our report card are Canada’s performance on productivity growth and our integration into the globalization process,” said Glen Hodgson, senior vice-president and chief economist. “The good news is that Canada has a strong macro-economic platform, which is helping us to weather the global economic storm better than other advanced countries. We have overcome significant economic challenges in the past 30 years.”
However, other fundamentals are not as strong. Canada’s C grade on productivity growth is well below that of global leaders like Ireland, Switzerland and Norway — and the gap is growing. This weakness directly contributes to lower income per capita and a $6,400 income gap with the United States.
“To boost our productivity performance, we need a coherent strategy. Rather than being uncoordinated and having various governments and the private sector heading in different directions, we need a nation-wide productivity strategy,” said Hodgson.
A poor ranking in foreign direct investment (FDI) — both inward (investment in Canada) and outward (Canadian investment abroad) — indicates that Canada is not sufficiently integrated into the global economy. From 10% of global FDI stock in the 1980s, Canada slipped to just three per cent in 2006.
Canada’s economy had a B grade in the 1970s and 1980s, which fell to a C in the 1990s, before rebounding to a B in recent years.
More details on How Canada Performs: A Report Card on Canada can be found at www.conferenceboard.ca/hcp.