The origins of Canada’s chronic weak economic growth lie in lacklustre business investment and exports, both of which have receded since 2015. Since then, the volume of business investment in Canada has fallen 17.6 per cent. The last four quarters actually mark something of an improvement: investment was flat. The investment intentions data from Statcan’s annual survey show no reversal of weak investment in 2023, however.
We should be analyzing the alarming and persistent decline of business investment in Canada and the loss of our export competitiveness. Instead an anti-corporate narrative continues to circulate that blames greedy corporations for the upturn of inflation since 2021. The national accounts data again show this to be false . Over the past two years, the share of corporate profits in GDP has fallen more than a percentage point, from 28.2 per cent to 27.1.
Rather than create an investment-friendly environment that would help raise productivity, our governments continue to spend more, funnelling cash to households. Despite flat GDP, household disposable income jumped three per cent in the fourth quarter, with the latest round of higher government benefits including a one-time GST credit top-up and a 10 per cent hike in Old Age Security payments for seniors 75 and older. Since 2015, real disposable income has risen 21.