David Dodge speaks with the Globe and Mail about Bennett Jones' latest Economic Outlook and how critical it is for Canada to overhaul its economic policy model to address its serious productivity problems.
He believes we need to spend a few years reallocating our spending away from consumption and toward investment in physical, human and intellectual capital—if we want to secure the building blocks for prosperity over the longer term.
"That's a hard message for people to accept, but that's the world we live in," David says. "It's not necessarily bad, to step back for a few years in terms of consumption, to make more room for investment."
Labour productivity must improve for Canada's economy to grow and that's not happening right now. David says we can keep adding jobs and still get poorer, unless productivity increases.
In the private sector, businesses need to invest in more machinery, equipment and technology. The Economic Outlook describes how Canada's businesses underinvest in innovation. Total annual expenditures in research and development are 1.6 percent of GDP for Canada, against an OECD average of 2.7 percent.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
