CALGARY—Business investment per worker—a key driver of higher living standards—has declined in Canada from slightly lower than in the United States (87.3 per cent) in 2014, to just over half (54.0 per cent) in 2024, the latest data available, finds a new study published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“The economic well-being of Canadians depends in large part on the strength of business investment, so poor investment performance is bad news for workers,” said

Tegan Hill, senior economist at the Fraser Institute and coauthor of Comparing Business Investment per Worker in Canada and the United States, 2007-2024.

According to the study, business investment per worker in Canada (adjusted for inflation) declined by 18.8 per cent from $20,310 in 2014 to $16,493 in 2024 (the latest year of available data). Business investment—which includes spending on equipment, machinery, factories and new technologies (but excludes residential homebuilding)—is vital to helping make Canadian workers more productive, which is ultimately the source of higher wages and living standards.

During that same period, business investment per worker (adjusted for inflation, in Canadian dollars) increased by 31.3 per cent from $23,263 to $30,555 in the U.S.

“More investment per worker means more productive workers, which in turn means higher living standards,” Hill said.

The results provincially vary considerably. Five provinces (Alberta, Saskatchewan, Manitoba, Nova Scotia and Newfoundland and Labrador) recorded declines in the value of business investment per worker (inflation-adjusted), ranging from -13.3 per cent in Nova Scotia to 54.9 per cent in Newfoundland. New Brunswick recorded the largest increase during this period with an increase of 24.3 per cent, however, it was still well under the national average.

“The waning ability to attract business investment in Canada should sound alarm bells and prompt policymakers to enact immediate policy reforms to make Canada a more attractive and hospitable destination for investment.”

Business investment per worker (inflation-adjusted)

Fraser Institute——Bio and Archives

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit fraserinstitute.org.

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