Corporate Training Magazine

Rebuilding Canada's Competitiveness
Vol 2 Issue 4- Sept 2006

By Kevin S. Liskowich

"Canada's progress depends on improving our productivity and global competitiveness," announced Conference Board of Canada president and CEO Anne Golden. "We seem to be a country that aims for the bronze. But as we coast along complacently, we're missing huge opportunities to do even better."

Golden's statements are supported by the results of the Conference Board's latest Performance and Potential report, which compares Canada's performance with top OECD countries in six broad categories: Economy, Innovation, Environment, Education and Skills, Health, and Society. Using 110 separate indicators, the benchmarking report assembles and compares data on 24 countries, highlighting the top 12 in each category that outperformed the rest.

The good news is that Canada is a top-12 performer in all six categories. Indeed, in the six categories tracked over the past four years, Canada has won 23 out of 24 'medals' for top-half placement an achievement matched only by Sweden, Finland and Switzerland. In fact, Canada is the only G7 country to deliver this level of consistent and bal- ance performance in providing citizens with the basic components of well-being.

But despite the top-12 ranking, the overall finding is that Canada's performance is slipping ‹we are stalling or losing ground in areas critical to our ability to compete globally.

Canada lost ground this year in four categories: Economy, Innovation, Health and Society. Poor perform- ance in the Economy category is primarily due to relatively weak productivity growth and the fact that we're not keeping pace in the growing compe- tition for global trade and investment. Canada has also slipped to fifth place on Innovation, which is a cornerstone of Canada's future competitiveness.

In the categories of Health and Society, our public record does not live up to our international brand. "In Health, we're at 10th place, down two rungs from last year. Even through we're spending more on health care, we're not keeping pace with the outcomes of other countries. Our poor placement in Society reflects lackluster performance on such indicators as poverty, especially child poverty," conveyed Golden.

And while Canada's ranking improved in Education and Skills, the results are misleading. Our students rank very high when they leave high school, but these skills decline in the adult population due to our weakness in continuing education and training.

Said Golden, "Many Canadians seem to think that the status quo in our country is OK, and that it doesn't matter if Canada slips a bit in global ranking. But it's not OK. The slippage really matters. We must embrace excellence and stop being satisfied with being good enough. Good enough won't take us where we want to go. To be competitive as a player in the new global economy, Canada must pursue a combined global trade and domestic competitiveness agenda. It should include measures that boost innovation and productivity, and foster the competitiveness of the North American economy."

She added that Canada should adopt policies to keep older workers in the workforce longer and do a better job of involving and working with our fast- growing Aboriginal population. We must also use our human capital better by solving the credentialing problem keeping skilled immigrants out of the workforce. This has become a major concern. In recent years Canada has and continues to suffer from the loss of a growing number of recent immigrants who end up leaving Canada because they can't get their professional credentials recognized in our job market.

"Whatever it is that (we) care most about in this country whether safeguarding the environment, revitalizing our cities, fighting poverty, making diversity work or fixing health care it's going to be advanced in the decades ahead only if we have the resources and options that come with growing national wealth. Resisting complacency about our country's economic future is a moral imperative. Any conversation about national programs needs to take account of this perspective."

In Golden's view, there are three key challenges the country must overcome in order to improve its competitiveness.

First, we need to ensure Canada's long-term competitiveness in a world that is being transformed by the risk of integrative trade and by the growing power of emerging economies such as China and India. This is fundamental for a trading nation such as Canada. Today, the world's most competitive firms are investing heavily in global supply chains, seeking the best quality and best-priced components for their products, whatever their source.

"To be competitive as a player in the new global economy, Canada must pursue a combined global trade and domestic competitiveness agenda. It should include measures that boost innovation and productivity, encourage outbound and inbound FDI, foster the competitiveness of the North American economy, and promote the development of Canada's major cities, which is where our population and economic activity are increasingly located," opined Golden.

Second, we need to deal with the implications of an aging population for our workforce and fiscal foundations. Canada must prepare for the impact of the demographic imbalance caused by low fertility and increased life expectancy. These demographic trends, combined with the increase in early retirement, is already causing labour shortfalls, putting pension plans and our health care system under more pressure and undermining our economic potential.

The third major challenge facing Canada is how to manage our natural resources--both for economic success and environmental responsibility. In this period of growing international demand for natural resources, we have a window of opportunity to develop a national natural resource strategy that maximizes current economic benefits, while ensuring the long-term sustainability of our resources and environment.

"These are by no means all of the policy steps we must take to address Canada's lagging productivity and competitiveness, but they're some of the most important," emphasized Golden, adding that ten provincial 'me first' strategies won't be enough to make this happen. "We need (to work together in addressing these challenges and develop) long-range national strategies to boost Canada's competitiveness in the world."