The Fraser Institute, web image
VANCOUVER, B.C. — Business investment per worker in Canada has fallen sharply over the past decade, widening the gap with the United States and raising concerns about future productivity, wages and living standards, according to a new report from the Fraser Institute.
The report found inflation-adjusted business investment per worker fell 18.8 per cent between 2014 and 2024, dropping from $20,310 to $16,493.
Over the same period, investment per worker in the United States rose 31.3 per cent, from the equivalent of C$23,263 to C$30,555.
As a result, Canada’s level of business investment per worker fell from 87.3 per cent of the U.S. level in 2014 to 54 per cent by 2024.
The 2024 figures reflect the final full calendar year under then-prime minister Justin Trudeau’s government.
Business investment includes spending on machinery, equipment, factories and new technologies, but excludes residential housing. Economists generally view it as a key factor in improving worker productivity, wages and long-term economic growth.
“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, a senior economist with the Fraser Institute and co-author of the report.
The study found provincial results varied widely.
Alberta recorded the highest level of business investment per worker in Canada in 2024 at $27,294, despite a decline of more than 50 per cent from $56,401 in 2014.
Saskatchewan ranked second at $33,386 after also posting a significant decline over the decade, while Newfoundland and Labrador dropped from $53,779 to $24,241.
Only a handful of provinces recorded gains over the period, with New Brunswick posting the largest increase at 24.3 per cent, although it remained below the national average.
Hill said governments should act to improve Canada’s investment climate.
“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,” he said.
The Fraser Institute is an independent public policy think tank based in Vancouver.
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