Canada slips in global competitiveness score
The Toronto Star
By Tara Perkins
Canada and the United States have slipped in a global ranking of competitiveness, with Switzerland grabbing the top spot, sparking calls for Canada to do more to boost its economic performance.
Canada fell to 16th this year, from 13th, on the Geneva-based World Economic Forum’s Global Competitiveness Index.
Roger Martin, dean of the University of Toronto’s Rotman School of Management, said the rankings indicate “Canada is not living up to its full potential in economic performance.”
The United States dropped from first to sixth place, beaten by Switzerland, Finland, Sweden, Denmark and Singapore.
The rankings take into account factors such as infrastructure, macro economy, government efficiency, health, education and market efficiency.
Martin, who is also chair of the Institute for Competitiveness & Prosperity - the World Economic Forum’s Canadian partner - places more weight on the corresponding Business Competitiveness Index in yesterday’s report. In that ranking, Canada fell to 15th from 14th.
While a one-spot slip shouldn’t cause worry, the longer trend is more troublesome, Martin said. In 1998, Canada ranked sixth.
“Canadian business and government leaders still have a lot of work to do to strengthen Canada’s competitiveness position in the world,” Martin said.
He would like to see lower taxes, more Canadians in higher education and further deregulation of industries such as telecommunications, transportation and commercial banking. But Martin believes the first step is for Canadian policy workers to do more work benchmarking this country against others.
“We have the highest taxation of business investment in the industrialized world,” he said.
“We’ve lowered it, and we say ‘hooray, we’ve lowered it.’ But that’s not the question. The question is how low has it gone relative to other people?”
A report released last week by the C.D. Howe Institute said that, in a reversal from last year, companies in Canada will pay lower taxes on profits of new investments this year than those in the United States.
But that report also said that, while Canada is making strides, it is lagging behind such countries as Australia, Finland, Ireland and the Netherlands.
“We only educate 25 per cent of our population in university,” Martin said.
“Is 25 good? The only way you can answer that is say, what do the best performing economies in the world do?”
Canada’s ranking is dropping not because the country is worsening, but because such countries as Norway and Japan have stepped up their competitiveness, Martin said.
On the brighter side, Martin said, Canada’s standing has been fairly steady when measured only against “consequentially sized” countries.
“There’s a side of me here that says do I really care that we’re behind Iceland and Norway? Iceland is about the size of Winnipeg” in terms of population, Martin said. “Norway is four million people sitting on a bunch of oil.”
Among countries with a population of at least 10 million, Canada ranked sixth, the same as it did in 2001.
