Canada slides to 16th place in world competitiveness index: Down three places
High taxes on business investment cited
National Post
By Peter Koven
Canada slipped three places in the global competitiveness rankings for 2006 as other countries did more to improve infrastructure, market efficiency and innovation.
The Global Competitiveness Report 2006-2007, released yesterday by the World Economic Forum, ranked Canada 16th in the world in terms of competitiveness, down from 13th a year ago. Canada was passed by Hong Kong, Norway, Iceland and Israel.
“It’s nothing startling. It’s a continuation of an ongoing trend,” said James Milway, executive director of the Institute for Competitiveness and Prosperity, the Canadian partner to the World Economic Forum. “In terms of business competitiveness, Canada is drifting in that we are not setting an environment that forces businesses to be as competitive as they can be.”
The global report ranks countries in three different sub-indexes to reach the final ranking: basic requirements [including infrastructure and education]; efficiency enhancers; and innovation factors. Canada’s ranking fell in the first two indexes and was unchanged in the third.
According to the institute, Canada has to do a lot more to live up to its economic potential. A good way to start would be to set out a fresh prosperity agenda, Mr. Milway said.
“If you look at the five priorities of the current federal government, there’s nothing in there tied to competitiveness and prosperity,” he said.
He pointed to high taxes on business investment and inadequate post-secondary education as two key reasons why Canada is lagging other countries. Another big factor is a business environment that doesn’t encourage enough competition.
“I have every confidence that Canadians companies have the brainpower and materials to [compete more], but I don’t think anyone does more than their environment demands,” he said.
There are signs that the competitive environment in Canada is improving. Mr. Milway points to increased public spending on universities and a government plan to pursue more competition in the telecom sector as two recent examples.
The highest-ranked country this year was Switzerland, which jumped from fourth to first. The United States, which came first last year, fell all the way to sixth.
The report states that U.S. competitiveness “is threatened by large macroeconomic imbalances, particularly rising levels of public indebtedness associated with repeated fiscal deficits.”
WHY SWITZERLAND IS NUMBER ONE
Global competitiveness rankings dethrone U.S. from top spot; Canada lags
1. SWITZERLAND CLIMBED
- Reputation for innovation, research and development
- Scientific infrastructure
- Intellectual property safeguards
- Excellent education and training
6. UNITED STATES FELL
- Budget and trade deficits
- Doubts about the effectiveness and trustworthiness of its political leaders
- Weaknesses in primary education and health care
16. CANADA RECEDED
- High taxation on business investment
- Inadequate post-secondary education
- Lack of intensity of local competition
.; Ran with fact box “Why Switzerland is number one” which has been appended to the story.
