Canada has fallen out of the top 10 in a ranking of the world’s most competitive economies, a sign that Canadians may have a harder time succeeding financially in the coming years.
The 2019 edition of the IMD World Competitiveness Ranking places Canada 13th out of 63 countries, the worst performance in the annual survey’s history, which goes back to 1997.
The country is being beaten by both aggressive free-market economies like Singapore and the U.S. (first and third, respectively) and by progressive countries known for their labour protections and high wages (Denmark, the Netherlands, Norway and Sweden).
Through the 1990s and early 2000s, Canada consistently ranked among the top 10 most competitive economies, but the country began a slow descent around 2015, when oil prices collapsed ― though that is only a small part of the reason for the decline.
And this problem can’t be pinned on Trudeau’s Liberals or any one previous government ― it’s a long-term trend in Canada’s economy.
A competitiveness index isn’t exactly a measure of how competitive a country is against other countries; rather, it’s a measure of how productive a country is. Productivity can be defined simply as “how much you get back for the effort you put in.” The more you get back for your work, the more “productive” an economy.
“Productivity is important because it has been found to be the main factor driving growth and income levels,” the World Economic Foundation says. “And income levels are very closely linked to human welfare. So understanding the factors that allow for this chain of events to occur is very important.”
So what’s going wrong in Canada?
A lot of long-term problems in Canada’s economy seem to be finally catching up to us, and one major issue that expert after expert cites is Canada’s relative lack of innovation and creativity.
The country’s business leaders have a reputation for being cautious, and following the crowd rather than taking risks on new ideas. That means Canada has fewer opportunities to create new businesses, and it makes the country uninteresting for foreign investors (except those looking to park cash in our housing market, that is).