Weak Capital Investment in Canada Hurts Canadian Workers
The higher a country’s stock of business capital, the better its workers are equipped to produce, earn and compete. Countries with abundant capital relative to their workforces earn higher incomes, and countries that add to their capital stocks faster can anticipate faster growth of living standards. Unfortunately, recent comparisons to other developed counties in the […] R&D tax credit review needs to focus on the right issues – Financial Post Op-Ed
Canada is not keeping up in the global competition for innovation-led growth and prosperity.
Our research and development intensity is low relative to other countries and not enough of our inventions are commercialized at home. Can Ottawa’s current review of the Scientific Research and Experimental Development (SR&ED) tax credit announced in its last budget make a difference?
In principle, yes, but early indications are that the review will focus on issues of dubious merit or those that would best be handled with new measures rather than by modifying SR&ED.
The federal review has two objectives. The first is to assess whether the SR&ED program is effective in encouraging R&D that benefits Canada. The…
William B.P. Robson on BNN – What’s the Matter with Canada’s Business Investment?
Bill Robson, CEO of the C.D. Howe Institute, joined BNN Bloomberg to discuss its latest report that explores why business investment in Canada is lagging so far behind other developed economies. He says Ottawa needs to invest in non-residential construction, machinery and intellectual property to equip Canadians with the incomes required to afford the high cost of living.
Kronick, Bafale – Deepening Canadian Capital Markets
Canada’s small and medium enterprises are facing numerous challenges that impede their ability to scale up. The C.D. Howe Institute has launched a policy working group to explore ways governments can help Canada’s SMEs grow by removing barriers to the availability and access to patient long-term financing, and deepen capital markets. This Memo is the […] Bafale, Robson – Canada’s Economy is Decapitalizing
From: Mawakina Bafale and William B.P. Robson To: Canadians Concerned about Productivity Date: July 18, 2022 Re: Canada’s Economy is Decapitalizing Yet another alarming inflation number from Statistics Canada – 7.7 percent year-over-year in May– has underlined that something is seriously wrong with Canada’s economy. Prices are rising fast because spending is rising fast while production is not. The […] Canada’s economy is decapitalizing – Financial Post Op-Ed
Yet another alarming inflation number from Statistics Canada — 7.7 per cent from May to May — has underlined that something is seriously wrong with Canada’s economy. Prices are rising fast because spending is rising fast while production is not. The capacity of our economy to produce is flatlining because business investment has been so weak that the stock of productive capital per worker is falling. If we do not turn that around, the outlook for real growth in living standards in the coming months, years and decades is bleak.
The basic problem is chronically low business investment, which has been the highlight — or lowlight — of Statistics Canada’s quarterly GDP reports for several years now. The cumulative effect of low rates…
Robert Asselin – Scientific Research and Experimental Development (SR&ED) Reform
From: Robert Asselin To: Finance Minister Chrystia Freeland Date: June 22, 2022 Re: Scientific Research and Experimental Development (SR&ED) Reform The modern application of science and technology is the new frontier of economic competitiveness. Advanced industries – with their high concentration of R&D and STEM workers – are the core of the world’s high-value economy […] Bafale, Robson – Canadian Investment in Intellectual Property Products is Too Low
To: Canada’s Minister of Finance, Chrystia Freeland From: Mawakina Bafale and William B.P. Robson Date: May 9, 2022 Re: Canadian Investment in Intellectual Property Products is Too Low Minister, your 2022 federal budget rightly highlighted the importance of economic growth for Canadians’ future prosperity and the fiscal health of Canadian governments. Much of the budget’s […] Daniel Schwanen – It’s Still Too Early to Write off the Shopping Mall
To: Canadian Shoppers From: Daniel Schwanen Date: May 6, 2022 Re: It’s Still Too Early to Write off the Shopping Mall Retail trade data for February show a continuing rebound for in-person shopping relative to the online variety, as people-to-people interactions emerged from restrictions imposed during the pandemic. Retail e-commerce – which includes curbside pickups – was a lifeline for Canadian […]Winner-take-all hasn’t hit retail yet – Financial Post Op-Ed
The retail trade data for February, released Friday, show a continuing rebound in in-person shopping relative to the online variety, as people-to-people interactions emerged from restrictions imposed during the pandemic.
Retail e-commerce — which includes when goods purchased online are subsequently picked up in a store — was a lifeline for Canadian businesses in 2020. But in-store shopping has come back with a vengeance. Despite the emergence of high-profile online suppliers, fierce competition remains the order of the day in retail.
Since peaking at 10 per cent of total sales by Canadian retailers in the first days of the pandemic, e-commerce’s share of retail sales has fallen sharply — to just over five…
William B.P. Robson – The Federal Gas Pedal Meets Bank of Canada Brakes
From: William B.P. Robson To: Canadians Worried About a Hard Landing Date: April 6, 2022 Re: The Federal Gas Pedal Meets Bank of Canada Brakes With inflation pushing 6 percent, and federal debt up about half-a-trillion dollars in two years, Canadian macroeconomic policy is a mess. It will get worse. The Bank of Canada is moving to get inflation […] The budget should think inside the box — the IP Box – Financial Post Op-Ed
Finance Minister Chrystia Freeland tables the federal budget Thursday. She should use the occasion to implement policies that would improve Canada’s lacklustre innovation. A useful step in that direction would be to announce that income from patents and other intellectual property (IP) will be taxed at a special low rate. Generally described as an “IP Box,” such an initiative would boost Canada’s flagging R&D spending, raise our low commercialization rate, and stem an outflow of IP profits to tax havens.
As I explain in a C.D. Howe Institute paper published today, two developments make this a good time for an IP Box. The first is an OECD-inspired international agreement that income taxed at a preferential rate must be derived…