Jeremy Leonard opines in the Financial Post that although Canada leads the G7 in GDP and employment growth during the past decade, labour productivity growth is lagging. Labour productivity growth slowed to an average of just 0.7% per year int he past decade, less than half its rate in the 1990s, and below the 2.4% annual growth in the United States.
The federal government has tweaked the SR&ED program, and reallocated some funds for direct grant programs. However, this alone is not enough to jumpstart productivity. Policies to diversify international trade have important positive effects on productivity. In fact, Industry Canada’s 2009 Survey of Innovation and Business Strategy found that Canadian companies that exported to global international markets were the most productive, followed by companies that only exported to the United States, followed by companies that only served domestic markets.
It should be noted that Canada is currently participating in several free-trade negotiations, including the Trans-Pacific Partnership Free Trade Agreement (TPP) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA). Although the opening of the marketplace will create increased competition in domestic markets, expanding export markets will allow companies to invest in technologies and processes to take advantage of economies of scale. The opening of the marketplace will force the hand of companies that only serve domestic markets- it will then become a necessity to export.
Companies that are looking to export should be made aware of the fact that the federal government currently has funding available for export marketing. These programs include the Export Market Access and AgriMarketing programs. Please contact NorthBridge for more information about these programs.