The CFIB says that capital investment in business machinery and equipment decreased 16% in the 10 years from 2013 to 2023, the equivalent of $1,178 less for every worker (adjusted for workforce size), which has made the productivity crisis worse.
The three main reasons cited by poll participants as deterrents to capital investment are the cost of equipment (69%), the cost of doing business (56%), and cash slow constraints (50%). For those in BC, Saskatchewan, and Manitoba around one third also cited the inability to write off Provincial Sales Tax as a barrier to increase investments.
“If we don’t improve our productivity and make it easier for businesses to equip workers with the tools and equipment they need to be more efficient, Canada risks falling behind its global competitors, losing entrepreneurs to other countries, and worsening the standard of living for all Canadians,” said Bradlee Whidden, senior policy analyst for Western Canada and report co-author. “We will all feel the impacts, that’s why governments need to act now, and fast.”
Productivity was recently cited by PwC Canada as a key thing to address to boost Canada’s M&A market.
Government action
But what does the CFIB want the federal government to do to tackle stagnant productivity and fuel investment?
