Canada needs policies that encourage business investment

Benjamin Dachis, William Robson and Aaron Jacobs are authors of the C.D. Howe Institute publication A Crisis of Capital: Canadian Workers Need More Tools, Buildings and Equipment.

What’s the bad-news Canadian economic story of 2015? The collapse in oil prices is hammering activity in the West. Even worse is how retrenchment in the oil patch, which had boosted national business investment after the 2008-09 slump, is revealing woefully weak capital spending elsewhere in the country.

In a modern economy, prosperity depends vitally on capital spending by businesses. When Canadian businesses invest in plants and equipment, they equip workers with technology that makes them more productive, and, ultimately, better paid. The bad news is that even outside the oil patch – including in Central Canada, which we need to lead the way in this lower-energy-price environment – investment per worker is anemic and has been lagging competitors abroad for years. Read More…