THE FROG ON THE STOVE – Canada’s global business competitiveness

OK so remember the parable about putting a frog in cold water and gradually heating the water?  The parable say the frog fails to recognize the heat and is eventually cooked. Well apparently frogs are smarter than that and they do jump out.  But the parable is still a good illustration of gradual negative trends that eventually become a crisis.

The Canadian Chamber of Commerce sounded the alarm bells again about Canada’s competitiveness.  In a letter to the Prime Minister and Premiers, they make the case while Canada works on climate change, that work isn’t coordinated with the big threat to Canada  – a decline in business competitiveness.

The facts they put on the table are:

  • Canada is a high labor cost jurisdiction – among the highest in the developed world.
  • Canada’s labor productivity and innovation performance is lacklustre at best.
  • Canada’s self inflicted electricity cost increases have turn a competitive advantage into a disadvantage.
  • Employment insurance cost increases and higher Canada Pension Plan contributions add to costs.

The Chamber is particularly concerned about Canada’s regulatory framework.  According to the World Bank rankings Canada declined from 4th to 27th over the past 10 years.  And things might get worse. The Chamber saves its strongest criticism for recent report on environmental assessment processes  The Chamber says the recommendations are unworkable and will kill investment in natural resource sectors!  

The Chamber politely pounds the table – if Canada wishes to be a leader on climate change we must also work hard on the factors that influence competitiveness.

They offer up three recommendations:

  • Establish a “Pan-Canadian Framework on Competitiveness” similar to the effort on climate change
  • Greenhouse gas regimes should recognise the work industry has already taken
  • Carbon pricing revenue should be directed to ‘climate friendly’ technology development

They ask that this be put on the agenda for the next first minister meeting. Severely Normal Albertans should expect that federal government action might be anemic.