Let’s first consider the possibility that we have underinvested since the global financial crisis . Most would agree that the global economy has on balance spit out sub-par growth since 2008, not really generating a convincing recovery. Then consider the bubble of activity that preceded the crash back in 2008. There was arguably a lot of pre-GFC investment to support the unsustainable level of production, excess that had to be re-absorbed before a true, new investment cycle could begin.
If that seems like a stretch, consider that in Canada, business investment as a share of gross domestic product has been well below the long-term average for years — and that at a time of suppressed global growth. More importantly for global capacity, U.S. business investment as a share of GDP took a long time to recover post-GFC, and has not yet returned to pre-GFC levels.
in most OECD nations. In Canada, there is a higher number of employees for each unit of GDP, a feature of the post-GFC period. Compared with the long-term trend, a crude calculation has us employing 700,000 to 800,000 excess workers. Cut that in half, and it’s still huge.Article content Labour constraints aren’t likely to improve. A third argument for higher investment is our structurally skinny demographic situation. Many are hailingin 2022 as a cure to this chronic ill. Not so fast; immigration numbers were boosted last year by 607,782 non-permanent residents , abetted by Ukrainians fleeing the war. We can’t count on similar future surges, unless we can be assured that it is possible to boost Canada’s regular immigrant intakes.
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