Sunday, December 16, 2012

A Conservative Canada Is An Uncompetitive One

It's odd that Conservatives advocate competition in the economy when under this Conservative government our economy has only become less competitive.

The World Economic Forum (WEF) has recently lowered Canada's ranking in global economic competitiveness from 12th last year to 14th place in 2012. This has been part of a steady decline since 2009 when Canada had been ranked the 9th most competitive country for business. The WEF index compares a wide array of data; Canada's fall over the years is attributable to poor scoring on macroeconomic policies, higher education and training, innovation, and business sophistication.

This drop in competitiveness since 2009 as measured by the WEF at least partially explains why Industry Canada's own numbers show that Canadian business registrations have only declined since that same year.

The World Economic Forum is not the only international organisation that has recently downgraded Canada's competitiveness. The World Bank has dropped Canada from 4th to 17th in its "Business friendly" ranking since Stephen Harper first formed his Conservative government in 2006.

And the Organisation for Economic Co-operation and Development (OECD) reports that while other countries are drafting policies that incentivize spending on research & development, and as a result show notable increases, in Canada less and less money is going towards innovation every year.

The OECD has reported that between 1997 (the first year data was available) and 2006, R&D spending in Canada increased as a percentage of Gross Domestic Product but after the Conservatives were first elected it has only decreased.

R&D spending as a share of GDP has gone down from 2% in 2006 to 1.74% in 2011, lower than the rate of spending in 1997. When Stephen Harper first became Prime Minister, Canada was ranked 12th in R&D spending but our country has dropped every year since, reaching 19th place among OECD countries in 2010, far below the organisation's average (see right graph).

Though other comparable data haven't been released yet considering Canada is only spending less on R&D it is more than likely our country is only falling further behind, becoming even less innovative and consequently less competitive.

All this of course begs the question, if Conservatives like competition so much shouldn't they at least try to have Canada compete?

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