Roger Martin report lays out action plan for boosting productivity and competitiveness

A key Ontario think tank says that despite Canada’s enviable social and economic status, a so-called prosperity gap with the US is costing the federal government $90 billion a year in lost revenue. In a report entitled Realizing Canada’s Prosperity Potential, the Institute for Competitiveness and Prosperity (ICP) calls for measures including changes to the tax system to increase investment, boost productivity and devise “broader and deeper support for innovation and commercialization”.

The report was delivered late last month at the World Economic Forum’s annual meeting in Davos Switzerland by Roger Martin, dean of the Joseph L Rotman School of Management at the Univ of Toronto and ICP chairman. The document is essentially a synthesis of previous ICP reports along with an action plan recommending that:

* Canadians set a higher standard for economic progress;

* individuals, governments and firms invest more in higher education;

* integration of immigrants into mainstream society and economy be accelerated;

* business and governments increase investments in machinery, equipment and software to boost productivity;

* governments “rethink” the impact of marginal tax rates on competitiveness; and,

* governments improve specialized support mechanisms designed to increase investment and innovation.

Factors contributing to lower Canadian prosperity vis a vis the US include a lower level of urbanization, lower educational achievement, weaker cluster effectiveness, and capital under investment. The ICP acknowledges that, of the $15,000 gap per average family between the two countries, $3,600 remains unaccounted for.

Despite our gap in prosperity relative to the US, Canada rates highly against nations of comparable or larger populations. The report lauds Canada’s performance in “combining prosperity with economic equality”, falling between Japan and the US and ranking above most European nations. The report can be obtained at www.competeprosper.ca.

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