Issue in Focus — Investment in Machinery and Equipment is Essential to Canada’s Future 

Report Highlights

Canadians need to be more aware of the importance of productivity drivers to the future of Canada’s economic well-being.

• A change in M&E investment directly affects productivity; however its impact is usually not as immediate or visible to the public, therefore leaving the misconception that it is less important.

Canada trails behind in investment and adoption of information and communications technology (ICT).

• Canada lags behind in ICT, a sub-group of M&E and the foundation for technological advancement in today’s digital world, compared to a number of advanced economies including the U.S. It is important for Canada to maintain investment levels similar to that of the U.S. – its largest trading partner – to retain a global competitive edge.

ICT acts as a vehicle that propagates research and development (R&D), which in turn advances innovation to its highest potential.

• Canada is falling behind global R&D advancement, however there is an opportunity to excel through collaboration between government, academic and business communities.

Low investment in and adoption of ICT by small and medium-sized enterprises (SMEs) is a contributing factor to Canada’s productivity challenge.

• The effectiveness of ICT in today’s business environment is still ambiguous among Canadian business leaders as they may not be convinced that the reward is commensurate with the level of financial investment.

Foreign direct investment (FDI) is a highly effective way to rapidly increase ICT investment and adoption.

• FDI allows qualified foreign companies to transfuse Canadian markets with their latest technologies. Technology transfers represent the largest benefit from FDI and an opportunity exists for Canada to adopt the latest technologies with minimal cost.

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