Deloitte Canada & Business Council of Canada launch Competitiveness Scorecard
TORONTO, March 5, 2019 /CNW/ - Together with the Business Council of Canada, Deloitte Canada today released its first-ever Competitiveness Scorecard measuring eight critical dimensions of Canada's economic performance on the global stage.
Competitiveness is a multifaceted concept, encompassing a wide range of factors that determine whether a country is an attractive place to invest, create jobs and do business. Although discussions about competitiveness often focus on taxation and red tape, the reality is more complex. In the Competitiveness Scorecard, Deloitte Canada conducted analysis of more than 500 data series across a dozen key global competitor nations and summarized Canada's performance in eight key areas: talent, economic stability, capital and investments, customers, infrastructure, innovation, tax and regulation.
The scorecard will play a significant role in the work of the Business Council's Task Force on Canada's Economic Future. Launched last month, the Task Force is engaging business leaders and a broad array of other stakeholders in advancing urgently needed policies to enhance growth and ensure a better future for all Canadians.
"Canada is one of the top countries in the world to start, grow, and invest in a business," says Frank Vettese, Managing Partner and Chief Executive, Deloitte Canada. "But to continue leading, our country must remain focused on supporting an economic environment that builds on our strengths and takes aim at factors that are holding us back. This scorecard provides us with an important baseline—across the many dimensions of competitiveness—so that we can measure our nation's progress toward boosting prosperity for all Canadians."
"The global economy is changing rapidly and our country faces intense competition for investment, jobs and talent," said Goldy Hyder, President and Chief Executive Officer of the Business Council. "The Competitiveness Scorecard allows Canadians to see at a glance the areas where we lead and where we lag. Our challenge now is to identify the key actions that will strengthen our country's prospects, contributing to the tax base that supports Canadians' social programs and quality of life."
To download Canada's Competitiveness Scorecard, visit here.
Key takeaways and facts across eight categories:
Talent – Canada's labour force is globally competitive
- In 2015, Canada's performance in math, science and literacy amongst secondary school students outperformed the Organization for Economic Co-operation and Development average and was in the top 10 globally in the Programme for International Student Assessment.
- Canada ranked first amongst peers in 2017 based on the percentage of immigrants employed. Nearly three-quarters of new Canadians have jobs, compared to the peer average of 64 per cent.
Economic stability – Canada's macroeconomic stability underpins economic growth
- Since the Bank of Canada adopted its inflation target band of one to three per cent, with a mid-point target of two per cent, it has on average managed to hit that target almost exactly. Inflation in Canada has been very stable over the medium-to-long term.
- While Canada has a high gross government debt-to-GDP ratio, compared to peers, it also has significant financial assets, meaning its net debt-to-GDP ratio was the fourth lowest amongst peers in 2017.
Capital and investments – Weak investment continues to drag on productivity
- At 10.8 per cent of GDP, Canada's private gross fixed capital investment (a measure of the overall investment in physical assets within an economy such as plants, machinery and equipment, as well as intellectual property) was the second lowest among peer nations in 2017.
- Venture capital investment as a share of GDP in Canada was greater than all peers except the United States and Israel, and amounted to approximately 0.16 per cent in 2016. However, there may still be venture capital shortfalls in some sectors.
Customers – Canadian firms are losing global market share and private sector debt is climbing
- Canada's domestic market is small, meaning that firms need to go global for growth. However, Canada's share of imports across a number of major trading partners has declined, showing a loss of market share and suggesting that Canadian firms are not taking full advantage of markets abroad.
- Canadian private sector debt as a percentage of GDP stood at 267 per cent, third highest amongst peers, and has consistently climbed over the past decade.
Infrastructure – The quality of infrastructure lowers Canada's competiveness
- Canadian businesses perceive infrastructure as lagging that in peer countries.
- Canada is projected to outspend on infrastructure compared to some of its peers by 2025—1.8 per cent of GDP in contrast to the United States at 1.53 per cent.
- From 1996 to 2016, the number of Canadian commuters taking public transit grew by nearly 60 per cent.
Innovation – Canada has fallen behind peers in its innovation performance
- In 2016, Canada's expenditures on research and development totaled 1.6 per cent of GDP, compared to a peer average of 2.3 per cent.
- On a per-capita basis, Canada produces fewer patents than its peers—7.3 per 10,000 residents compared to 9.4 in the United States and 21.4 in South Korea.
Tax – The Canadian tax environment can be uncompetitive relative to the United States
- In 2018, the United States reduced its average combined corporate tax rate to 25.8 per cent, compared to Canada's average of 26.8 per cent.
- Canada's top talent pays more income tax compared to most peer nations, with a marginal tax rate of 53.5 per cent, the fourth highest among peer nations.
Regulation – Canadian firms can encounter a higher regulatory burden than their peers
- Canada's position on the World Bank's 2019 Ease of Doing Business report has fallen since 2006, from fourth in the world to 22nd.
- Obtaining a permit for new construction takes 168 days longer in Canada than the United States.
Deloitte provides audit & assurance, consulting, financial advisory, risk advisory, tax and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights and service to address clients' most complex business challenges. To learn more about how Deloitte's approximately 264,000 professionals—9,400 of whom are based in Canada—make an impact that matters, please connect with us on LinkedIn, Twitter or Facebook.
Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.
About the Business Council of Canada
Founded in 1976, the Business Council of Canada is a not-for-profit, non-partisan organization representing business leaders in every region and sector of the country. The Council's member companies employ 1.7 million Canadians, contribute the largest share of federal corporate taxes, and are responsible for most of Canada's exports, corporate philanthropy, and private-sector investments in research and development. Through supply chain partnerships, service contracts and mentoring programs, Business Council members support many hundreds of thousands of small businesses and entrepreneurs in communities of all sizes, in every part of Canada. Please connect with us on LinkedIn or Twitter and subscribe to our recently launched podcast, Speaking of Business.
SOURCE Deloitte & Touche