Bureaucracy and lack of innovation seen to drag down Canada as a place to do business

Canadian leaders perceive these factors as hindering the overall business environment

OTTAWA, July 10, 2013 /CNW/ - A 2012 executive opinion survey for the World Economic Forum found that Canadian business leaders see inefficient government bureaucracy and a lack of innovation as the main obstacles to doing business in this country.

"Canada is generally a good place to do business, but poor innovation performance is hindering our competitive potential," said Douglas Watt, Director, Organizational Effectiveness and Learning Research at The Conference Board of Canada, which administered the survey in Canada.

"Firms in Canada need a business environment that gives them the capacity to innovate without facing undue barriers in bringing new innovations to market."

  • Canada's standing in global competitiveness rankings continues to wane.
  • Business leaders identified weak access to financing as the third-most problematic factor - a challenge that may also be limiting innovation.
  • As compared to a few years ago, Canadian business leaders are now less likely to identify tax rates and labour regulations as main problematic factors.

In the survey of executives for the World Economic Forum's Global Competitiveness Index, Canadian business leaders indicated that the five most problematic factors for doing business were:

  • inefficient government bureaucracy;
  • insufficient capacity to innovate;
  • limited access to financing;
  • inadequately educated workforce; and
  • tax rates and tax regulations.

Overall, 16.4 per cent of Canadian business leaders identified inefficient government bureaucracy as a problem. Only in Italy was this factor named as a problem as frequently as it was in Canada. Multiple layers of regulation and slow administration systems may be among the reasons why Canadian business leaders feel government bureaucracy could be more efficient.

An insufficient capacity to innovate was identified as a problem by 15.1 per cent of Canadian business leaders.

Two items, "inefficient government bureaucracy" and "access to financing", have been ranked by Canadian business leaders as top problematic factors for the past five Executive Opinion Surveys.

In contrast, tax rates and restrictive labour regulations ranked high among the most problematic factors between 2008 and 2010. In 2011 and 2012, tax rates and labour regulations dropped in importance as a problem for doing business.

This research examined data from the World Economic Forum's Executive Opinion Survey, which asked business leaders to rank the five most problematic factors for doing business in their countries from a list of 16 possibilities. The Conference Board is the Canadian Partner Institute for the World Economic Forum and carries out the survey in Canada.

The Centre for Business Innovation publication, Most Problematic Factors for Doing Business in Canada: A Business Leaders' Perspective, compares the Canadian results with those of the top five countries in the 2012-2013 rankings—Switzerland, Singapore, Finland, Sweden, and the Netherlands - along with the other six members of the G7.

SOURCE: Conference Board of Canada

For further information:

Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221
E-mail: corpcomm@conferenceboard.ca


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