Lack of investment is a 'big part' of Canada's productivity slowdown — and it could get worse

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Dark Angel 760k and still delivering | SaltWire #thinkingoutloud #medicalcourier #halifax #carsA lack of innovation and investments in businesses are key reasons why Canada’s labour productivity growth rate has declined in the past two decades, according to a new Statistics Canada study, and business leaders say the capital gains tax hike in the latest budget will only make things worse.

But business leaders have criticized the federal government’s decision to increase the capital gains tax to 66.7 per cent from 50 per cent on capital gains of more than $250,000 per year.and the best way to get it back up is to attract new investments,” Renaud Brossard, a spokesperson for Montreal Economic Institute said in a release. “And few are those who have been able to lure investments and job creators with promises of higher taxes.

“You’ve seen those signs that say: In emergency, break glass — well, it’s time to break the glass,” she said in a speech on March 26. Investment in capital declined following the collapse of commodity prices that started in 2014, and multifactor productivity fell to minus 2.2 per cent in 2021, although it grew 0.6 per cent in 2022.

 

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