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Canada’s Business Investment Lags US, OECD

This Graphic Intelligence looks at business investment in Canada, the United States and other OECD countries. After improving against international competitors during the 2000s and early in the 2010s, business investment in Canada has slipped badly, lagging investment in the US and other advanced economies.

Adjusting for prices and sizes of labour force, it is estimated that the average Canadian worker enjoyed only 29 cents of new investment in intellectual property products in 2020 for every dollar enjoyed by the average US worker. Add other capital – non-residential structures, and machinery and equipment – and new investment per available worker in Canada in 2020 was about 58 cents for every dollar of investment per worker in the United States – lower than at any point since the beginning of the 1990s.

Since 2015, the gap between new capital per member of the workforce in Canada and that in other OECD countries has been unprecedently wide. In 2020, businesses in other OECD countries likely added more than $16,000 of new capital per available worker, $4,000 above Canada’s level. Canadian workers enjoyed about 60 cents of new capital for every dollar spent on their OECD counterparts.

To learn more about Canada’s business investment and how policymakers can help improve investment performance, read “From Chronic to Acute: Canada’s Investment Crisis” by William B.P. Robson and Miles Wu.