This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, March 8, 2024
In the past few weeks, I have attended four meetings in which Canadian business leaders pointed to the lack of capital to fund projects in Canada. These entrepreneurs were not the ones you would expect, like oil and gas producers. Instead, they were from companies in tech, renewable energy and critical mining — who you would think would have no trouble attracting funds, given the heaps of government handouts these days. But even these companies are looking to invest outside Canada, especially in the United States, with its booming US$25-trillion economy.
I heard many reasons as to why Canada is out of favour these days. Miners referred to labour shortages, regulations and unsettled treaty issues with First Nations that make it hard to build anything. Startups say innovation hubs lack connections with venture capitalists. Several complained that big Canadian banks lack enthusiasm for investment in our slowing economy. Investors are also concerned about deficit spending, uncompetitive tax policies and scant political interest in private-sector investment.
No one knows exactly why investors are so turned off Canada but, with real per capita GDP essentially flat for eight years, our economy seems to be as stuck “as a painted ship upon a painted ocean” (to borrow Coleridge’s phrase from the Ancient Mariner). This week, however, an old guard of Canada’s business community says it knows what’s wrong: too much pension money is invested internationally. In a full-page newspaper ad, they pressed governments “to amend the rules governing pension funds to encourage them to invest in Canada.” They should do so because pension funds would not exist “without government sponsorship and considerable tax assistance.”
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