Philip Cross: Statscan’s latest report shows how badly our governments demolished business investment
Source: Financial Post
Investment has fallen steadily since 2014, with a total decline of almost 18 per cent, making it one of the weakest in the G7
There is no clearer sign that Canada’s long-term economic prospects are diminishing than yet another drop in business-investment intentions. But that’s exactly the dismal news delivered by Statistics Canada’s annual survey, released Wednesday. The steady erosion of business investment in the country, even as it strengthens in the U.S., offers a blanket condemnation of our federal and provincial policy trajectories.
Investment in Canada has fallen steadily since 2014, with a total decline of almost 18 per cent. Once the strongest in the G7, it has been the weakest over the past four years. This latest decline will surprise the Bank of Canada, whose own most-recent survey revealed “broad-based positive investment intentions” returning investment “back to near post-recession highs.” Why are the two reports so different? The Bank of Canada’s covers 100 firms; Statcan’s includes about 25,000.
Alberta led the decline in investment. Some of the weakness reflects the winding up of several oilsands projects that made investment there appear slightly better than it should have. Now that they’re complete and no new plants are coming, oilsands investment is at its lowest level on record, below even the worst of the 2009 recession. More revealing is that capital spending plans in the conventional oil and gas industry also show a significant decline of seven per cent, confirming the stories that drilling rigs are heading south to the more hospitable U.S. investment climate.