Winning Globally
Direction: Stuck
Risk: Medium
Pace: Lagging
This pillar focuses on the extent to which our companies are achieving global scale through innovation and sustained investment.
We also assess how well we are doing in creating Canadian-grown global champions.
The importance of putting investment at the forefront of our economic policy debate is something we’ve tried to draw attention to since the Coalition launched in 2021. Canada’s
productivity crisis—which is manifesting in falling per capita income levels—is fundamentally an investment crisis. And just about every metric for private sector investment looks terrible.
Growth at a glance
Aspirational targets have been set across the three pillars to attain long term, inclusive and sustainable growth.
GDP per capita ($)
Canada’s gap to US GDP per capita has grown from 2019 and represented ~$17,800 in 2023.
Growth of GDP per capita in Canada has underperformed most of its G7 peers since 2010.
The decline in investments has impacted both our traditionally highest-productivity industries, such as oil and gas and manufacturing as well as our less productive sectors,
such as construction and some services. It is essential to increase investment across all sectors in Canada. Lower productivity sectors could achieve stronger gains simply by stronger adoption of existing technologies and streamlining inefficiencies in the regulatory environment. Productivity overall could be strengthened over time by pivoting the Canadian economy more towards the sectors with the highest productivity and value added.
Source: World Bank
Scale Through Innovation
Business investments in R&D (% GDP)
Business R&D lags peer countries suggesting an opportunity for the private sector to further invest in supporting Canada’s innovation.
Business spending on research and development — the source of new ideas that can be commercialized — continues to stagnate and lag our peers.
As a share of real GDP, business R&D spending hovered at about 0.6 per cent last year. That’s little changed from 2023 and well below the Coalition’s target of 1.8 per cent of GDP by 2030. Private sector R&D expenditures in Canada are well below peers like the U.S., where businesses spend three times as much as we do as a share of the economy.
All of this threatens our ability to build a competitive advantage.
Investment in productive tangible assets per worker ($)
Canada’s investment in M&E lags behind most G7 countries.
Canada’s investment in M&E increased slightly in 2022 compared to 2021. However, the overall trend since 2016 doesn’t indicate a promising direction for achieving its goal in 2030.
The situation is even more dire when looking at real investment per worker. That gauge remains little changed from even two decades ago. This may be in part because Canada’s economy is made up primarily of small and medium-sized businesses, which are overall less likely or able to invest than larger companies. And, while some of this may be because incentives to invest for some firms may be lower if they can instead hire cheaper labour through immigration, there is ample evidence that even higher-skilled immigrants are not being matched with jobs that put these skills to proper use.
Investment in intellectual property per worker ($)
Canada’s investment in M&E and IP lags most G7 countries.
Canada witnessed a slight increase in IP investment in 2022 compared to 2021. Except for Italy and Germany, Canada lags behind other G7 countries in 2022.
Canada’s overall trend since 2016 doesn’t indicate a promising direction for achieving its goal in 2030.
Spending on intellectual property, which has struggled to break much beyond the two-per-cent-of-GDP threshold over the past two decades. While this is a complex matter, and other countries are also struggling with weak investment, it’s important to recognize that policy matters.
Canadian Global Champions
Global Canadian leaders (#)
The number of Canadian leaders increased by one to 14. Three leaders dropped off and four new leaders were added to the list.
Canada is facing challenges in establishing itself as a corporate leader on the global stage. The number of Canadian companies ranked among the top 10 globally in their respective industries inched higher in 2024 to 14 from 13 the previous year. But, we had as many as 20 global champions in 2022 and we’re well below the Coalition’s 2030 target of 40.
Average export value per SME ($)
The narwhal list showcases Canada’s tech success.
The data continues to show much better results when it comes to scaling up our tech companies. The number of private startups with billion-dollar valuations increased to 25 in 2024 from 23 a year earlier. We’re well past the Coalition’s 2030 target of 17.
Canada cannot compete without a favourable investment environment, especially when compared to the United States. That includes an environment that has predictable and efficient rules of the road in Canada — including with regards to regulations, compliance and taxes — compelling business cases for investment in our country.
Number of “narwhals” worth $1B+(#)
The average value of SME exports has decreased since last year.
The Canadian government aims to increase overseas exports by 50 per cent from 2018 to 2025 - implying an annual increase of ~5 per cent on average by year.
Related Insights
