Canada risks squandering prosperity, task force says
The Globe and Mail
By John Partridge
Canada has one of the world’s richest economies but could fritter away its “full prosperity potential” if it does not act now to improve productivity by investing more heavily in such key areas as machinery, software, infrastructure and education, a provincial task force says.
“We need to avoid a vicious downward economic spiral of underinvestment, reduced productivity, reduced capacity to invest, further-reduced productivity and the resultant restriction in our standard of living,” said Roger Martin, chairman of the Ontario task force on competitiveness, productivity and economic progress.
“Instead, we can create a virtuous circle by investing more and strengthening structures to increase productivity and prosperity.”
This is true for businesses, individuals and governments, which, the report contends, have been shifting their spending toward consumption, from investment.
Mr. Martin is scheduled to present the report today at the annual meeting of the World Economic Forum in Davos, Switzerland.
The report says the United States is the only country with a sizable population that outperforms Canada, measured by per capita gross domestic product on a purchasing power parity basis.
This “persistent prosperity gap” grew to $7,200 per capita in 2003, as per-capita GDP on this basis came in at $45,700 in the United States and $38,500 in Canada.
