CanCompete: Overview
CanCompete is a three-year program of research and dialogue designed to help leading decision makers advance Canada on a path of national competitiveness. CanCompete explores five of the seven strategies presented in the Conference Board’s report Mission Possible: Sustainable Prosperity for Canada. To accomplish this, the Board created five new research centres designed to move from individual strategies to specific action plans. The five new research centres are: Launched in October 2007, CanCompete actively engages private and public sector leaders in setting national policy direction. Some 30 companies and organizations have invested in the projects, providing invaluable financial, leadership, and knowledge support. Completed Projects (March 2011)
By Vijay Gill Due, in part, to a prolonged period of underinvestment, Canada is faced with an “infrastructure gap.” Recent infrastructure funding increases have started to address this issue. However, increased public funding alone cannot address the entire gap. The reason for this is that competition for public funding has stretched the public purse to such an extent that the whole gap cannot be eliminated. As a result, other methods of reducing the infrastructure gap—such as through enhancing the productivity of infrastructure services and managing demand through pricing mechanisms—are required. This report examines the productivity and pricing practices of four infrastructure services in Canada: rail freight, urban transit, natural gas distribution, and water and wastewater services. The report also examines changes that have helped increase the efficiency of certain infrastructure services. And, it explores how the changes could apply to those services faced with declining productivity and large infrastructure gaps. (April 2008)
By Anne Golden, Michael Bloom, Natalie Brender, Glen Hodgson and Gilles Rhéaume The purpose of the Progress Report is to identify the steps taken in 2007 to make Canada more globally competitive and identify areas where vision and action are needed. In January 2007, The Conference Board of Canada released the final report of The Canada Project, Mission Possible: Sustainable Prosperity for Canada. The Progress Report provides an update of developments in public policy during 2007, giving readers a sense of the extent to which the commitments, interests, and agendas of governments, policy-makers, and leaders at all levels took Canada in a positive direction as measured against the yardstick of sustainable prosperity. We assessed progress in five strategy areas: embrace competitiveness and productivity; rethink the workforce; adopt a coherent international strategy for trade, investment, and foreign relations; renew resource industries; and give Canada's major cities the resources they need to succeed. We tested the soundness of our assessments by consulting 13 outside experts, and invited them to rate the 21 sub-strategies we had examined, based on their considered judgment of the progress made in 2007. Their aggregated assessments are included in the report. (January 2008)
By Anne Golden, Glen Hodgson and Mario Lefebvre Canada’s cities are facing a fiscal imbalance that threatens their ability to provide services, programs, and infrastructure. Our competitive edge depends on our cities which are under pressure to attract the skilled individuals and firms Canada needs for success. At the same time, they are struggling to cope with a fiscal imbalance that threatens their ability to provide services, programs, and infrastructure. Sustainable Funding for Canada’s Cities examines the problem and proposes solutions. (February 2008)
By Len Coad, Glen Hodgson and Gilles Rhéaume Part of the Canadian Tax Reform for Sustainable Prosperity series, this briefing looks at how taxes and markets can be used to combat global warming. Tax measures, coupled with market forces, will be essential in the fight against climate change and the ability of Canadian firms to adjust. Green taxes and green investment tax credits are needed if Canadian firms are to accelerate their technological adaptation to a carbon-priced world. As a complement to green taxes, a cap and trade system should be implemented, combining regulation with market forces via emissions trading. (April 2008)
By Glen Hodgson and Sabrina Browarski In this briefing, The Conference Board of Canada argues in favour of a harmonized consumption tax system. The current situation of having tax regimes operating at cross purposes across the country undermines incentives, acts as a drag on productivity, and adds costs to businesses. A concrete way to improve the efficiency of the tax system would be through harmonization of consumption taxes into a single value-added tax system. Specifically, provinces that have a consumption or sales tax should work with the federal government to harmonize their retail sales tax regimes with the federal GST in order to create a harmonized value-added consumption tax system—ideally at a single rate. Such a system would reduce business costs and provide a welcome and necessary boost to Canadian productivity growth. CanCompete Activities Members are invited to the 2nd annual CanCompete Advisory Board meeting will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2. International Trade and Investment Centre (ITIC) Completed Projects Trends in Foreign Direct Investment and Merger and Acquisition Activity and Implications for Canada
This research project sought to provide the longer-term background required to help answer the question: Is Canada being “hollowed-out”? Research on this topic was important since the debate had become highly polarized. At one end of the spectrum, some business leaders, interest groups and political organizations were highly concerned with acquisitions of Canadian assets by foreign interests since they felt it ultimately means a loss of control over key business functions in Canada. At the other end of the spectrum, some economists and statisticians argued for policies favoring openness to investment, stating that the country, on a net basis, is benefiting from these foreign investments. To help fill the information gap, this research project reviewed trends in world and Canadian FDI and M&A activity. This served as the basis for an analysis of the implications for Canada of the various types of financial transactions. Report:
Trends in Foreign Direct Investment and Mergers and Acquisitions: International and Canadian Performance and Implications
(February 2008)
By Louis Thériault and Kip Beckman Recent foreign acquisitions of large Canadian companies have raised concerns that Canada is being “hollowed out.” However, an examination of recent mergers and acquisitions in Canada belies this view. High-profile megadeals are an exception in the long-term trend. Over the past 15 years, Canadian companies have been more active in acquiring foreign companies than have been foreigners in purchasing Canadian entities, even in the large-deal category of over $1 billion. Trends in Foreign Direct Investment and Mergers and Acquisitions: International and Canadian Performance and Implications predicts that M&A activity will slow down over the near term due to the high Canadian dollar and weaker profit growth in the United States. In the medium term, Canada will still have to face a structural challenge, since its investment position in the world has been declining over the past 26 years relative to that of other Organisation for Economic Co-operation and Development (OECD) countries. International Comparison of Inbound Foreign Investment Review Regimes and Practices
This project compared inbound foreign investment review regimes and practices in Canada and selected countries and their implications for policy, business and future cross-border trade and investment. During a 16 month period in 2006-07, foreign investors purchased an estimated 600 Canadian companies worth $156 billion. The surge of M&A prompted renewed concerns over the so-called “hollowing out” of corporate Canada as some of the country’s iconic companies fell to foreign ownership. In response, the federal government announced plans to review the country’s competition policy and began to consider modifying the Investment Canada Act, particularly as it pertains to Ottawa’s ability to screen and block foreign takeovers that threaten “national security.” The move comes amid a groundswell of similar decisions by countries from Germany and France to India and Indonesia looking to fend off foreign incursions spearheaded by a global glut of private equity and sovereign state-controlled funds. This research project assessed the Investment Canada Act and other protections in place that limit or block foreign ownership in order to evaluate the relative openness of the Canadian economy to foreign acquisitions. It also examined the legislative and regulatory ability to block unwanted takeovers compared to other countries. The resulting report explains the extent to which the current regime puts Canada at a comparative disadvantage in protecting strategic industries or companies as well as the implications of increased protection and scrutiny of foreign investment. Report:
Foreign Investment Review Regimes: How Canada Stacks Up
(April 2008)
By Andrea Mandel-Campbell Foreign Investment Review Regimes: How Canada Stacks Up compares Canada’s foreign investor screening policies and practices with those of its peers. According to the Organisation for Economic Co-operation and Development (OECD), Canada has among the world’s most restrictive regulatory barriers to foreign investment. But these calculations take into account overt, explicit foreign investment screening requirements, while ignoring opaque barriers such as political interference and state-owned enterprises. When both implicit and explicit barriers to foreign direct investment (FDI) are considered, Canada is no less restrictive than France, Germany, and Italy—which appear less open to FDI than their OECD rankings suggest. But while more transparent, Canada’s regime is a confusing mix of protectionism and openness that seems to work at cross purposes. Policy-makers must bring greater coherence to the country’s foreign policy review regime or risk putting Canada at a competitive disadvantage to jurisdictions with clear FDI objectives. Current Projects The next set of projects is being developed for review by ITIC members. Centre Activities - CanCompete members were invited to ITIC’s January meeting in Toronto, where the results of Foreign Investment Review Regimes: How Canada Stacks Up, were previewed, as well as to the April web conference on SMEs and Globalization: What Does the Evidence Show? which the Centre will be publishing this spring.
- CanCompete members are welcome to attend ITIC’s fall meeting taking place on September 24th and 25th, 2008 in Montreal. The meeting focus is “Global Opportunities, Obstacles and Change for Small and Medium-Sized Canadian Enterprises.” The meeting will include original Conference Board research on how smaller businesses engage globally and a business panel including a range of SMEs. CanCompete members will be notified once the agenda is finalized.
- Centre members are invited to the 2nd annual CanCompete Advisory Board meeting will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2.
Centre on Productivity (CP) Current Project Sluggish Productivity Growth in Canada: Could the Urbanization Process Be a Factor? Project Description:
There is an extensive literature on the urbanization process looking at both conditions of urbanization and urban concentration. There is a widespread view that there is not only an optimal level of urbanization but also an optimal level of urban concentration, typically where the urban population of a country is concentrated in one or two major metropolitan areas. For this research project, the Conference Board reviewed the extensive literature and empirically tested where Canada stands in its urbanization process. It has been widely argued that there is a cost in productivity when a country deviates from its optimal level of both urban concentration and level of urbanization. Is this the case for Canada? If so, does this explain, at least in part, Canada’s well-documented relatively weak productivity performance relative to other industrialized countries? Or is the answer better found in other key productivity drivers, including: the capital stock, the level of education, the size of firms, etc. These questions are being tackled in the empirical analysis of this research. This research project examines if Canada’s relatively poor productivity record might be explained, at least in part, by the country’s urbanization process. Project Update:
The data has been gathered and the empirical testing is completed. A first draft is already circulating among Conference Board colleagues. The draft will be completed and distributed to members by the end of June, as originally scheduled. A teleconference meeting with members will be held to obtain reactions and feedback on the project’s draft findings, in all likelihood in mid-July. Once feedback is received, adjustments will be made to the research and a final report will be submitted for approval. The final report will be published in the Fall of 2008. Centre Activities Centre members are invited to the 2nd annual CanCompete Advisory Board meeting will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2. Centre on Regulation (CR) Current Project
Improving Major Project Reviews by Governmental Departments and Agencies Project Description:
This research project analyzes the federal and provincial approval processes that apply to large projects. Major projects in Canada face significant regulatory challenges, whether the projects are related to resource development, infrastructure, or industrial development. Federal responsibility for various aspects of a major project may attach to different departments, requiring multiple applications and resulting in separate and potentially different review processes. Federal regulatory duties may overlap with provincial responsibility, particularly where environmental protection, navigable waters, or resource development are involved. To further complicate the process, the duty to regulate is usually enshrined in legislation and accompanying regulations. Each department or agency that must review a project will do so within the context of its own legislation. This makes it more difficult for individual departments to accept the findings of other departments regarding a particular project. Some progress has been made in this direction. For example, the substitution provisions between the Canadian Environmental Assessment Agency and the National Energy Board provide some promise that federal agencies can significantly reduce overlap by relying on each others’ reviews. However, the majority of examples still point to a need for significant improvement. This research project analyzes the federal and provincial approval processes, starting with the legislated duties of each department or agency involved. The analysis then extends to the review processes and identified areas of duplication. It includes an examination of international examples of benchmarks and best practices designed to coordinate inter-departmental and inter-governmental project reviews. The principles identified during this phase will be applied to specific examples from Canada and elsewhere. The final step is to formulate recommendations for cooperation that will reduce the regulatory burden on large projects. These recommendations will focus on practical steps, rather than broader policy issues. Project Update:
The research is very nearly complete, with just a few gaps to fill. A draft will be circulated by June 16 so that Centre members have ample opportunity to review it prior to the conference call on June 24th. In addition to CanCompete members, the draft will be circulated to the Major Projects Management Office and Treasury Board Secretariat for their comments. After all comments have been received, we will prepare a final report for layout and publishing in July. Centre Activities Centre members are invited to the 2nd annual CanCompete Advisory Board meeting will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2. Centre on Infrastructure (CI) Current Project Effective Public-Private Partnerships for the Provision of Transportation Infrastructure and Services Project Description:
Public-private partnerships are an increasingly important vehicle for delivering transportation infrastructure projects. Governments in Canada are making important efforts to address massive infrastructure requirements and to deliver projects within reasonable time frames. However, Canadian experience with PPPs in the transportation sector, and in public transit in particular, is relatively limited by international standards. Canadian policy-makers and corporations continue to face a steep learning curve as to what projects and practices will and will not work. This research project identifies the policies and practices which make for successful public-private partnerships (PPPs), based on the Design Build Finance Operate (DBFO) approach pioneered in the UK in the early 1990s. It identifies the planning, policies and practices required for successful PPPs in the transportation sector—i.e. PPPs which proved to be commercially viable and provided value for money to the public sector over the life of the agreement. It also identifies features that tend to characterize successful PPPs and the potential pitfalls in designing and implementing them. These features cover the risks that can be transferred to the private sector cost-effectively, value for money comparisons to public sector provision, and the types of incentives and performance standards used in PPP agreements. The study focuses on PPPs in the UK and other jurisdictions with extensive transportation sector PPP experience, as well as Canadian transportation sector PPPs in the last decade. The methodology consists of a review of publicly available documentation, combined with interviews of public and private sector practitioners and insights gathered from an Executive Weekender on public-private partnerships organized by the Conference Board of Canada in May 2008. Project Update:
This research initiative is now close to completion. Interviews with practitioners from both public and private sectors have been conducted. A draft report will be ready at the end of June for the advisory board to review. In early July, a conference call will take place to receive feedback and to gain insights from advisory board members. The final report will be published in September, 2008. Centre Activities Centre members are invited to the 2nd annual CanCompete Advisory Board meeting will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2. Centre on the Future Workforce (CFW) Current Project Making Immigration Work: The Global Competition for Talent and the Renewal of Canada’s Immigration System
A Convergence of Canada’s Temporary and Permanent Migration Programs Project Description:
Many regions and sectors in Canada are enjoying booming economies. Shortages of skilled workers in some jurisdictions and sectors are becoming so severe that they are limiting economic growth. Increasingly, the shortage of skilled workers is trumping other issues and concerns facing employers. Bringing more skilled immigrants to Canada, more efficiently, and tapping into the large pool of skilled immigrants are viable options to help alleviate the labour supply shortages. Where immigrants are not readily available, temporary workers are being brought into the country in increasing numbers. In recent years, the line between permanent immigrants and temporary foreign worker status has become increasingly blurred. This research project seeks to understand better the shifting nature of immigration policies and practices in Canada; and the nature and implications of the connections between the permanent and temporary immigration systems in Canada (including the provinces—and their provincial nomination processes). It examines the current impact the two sources of foreign-born labour are having on individual firms, industries, and sectors of the economy in Canada. It also considers the strategic implications for employers, governments and immigrants of increasing the interconnectedness of these two sources of labour. Key questions that are answered include: What is shaping Canada’s immigration system? How well is the current system addressing Canada’s socio-economic needs? What are other countries doing that Canada can learn from? How do the two systems of temporary and permanent immigration work? How well do they interconnect? How well are they doing in meeting Canada’s labour market and economic needs? Project Update:
This research initiative is well underway. - Phase 1: Literature review of permanent immigration and temporary foreign worker programs; and Canadian, US, Australian and UK immigration systems and policies (past, present and future) was completed in May.
- Phase 2: Key informant interviews with business leaders, Canadian Immigration officials and Australian and UK High Commission representatives were completed in early June.
- Phase 3: Three case studies of Canadian organizations/sectors involved in hiring permanent and temporary foreign workers: (Maple Leaf Foods, Oil and Gas Sector, and MexiCan Drywall) will be completed by late June.
- Phase 4: A draft report will be prepared by July 8, 2008 for the Advisory Board to review and provide comments.
- On Monday, July 14, 2008, a teleconference will take place to receive feedback and to gain insights from advisory board members. The final report will be published in September, 2008.
Centre Activities Centre members are invited to the 2nd annual CanCompete Advisory Board meeting which will take place in Toronto on September 29, 2008. Members will be briefed on completed projects and current research, and will be invited to provide strategic advice and direction to CanCompete relating to new projects and communications activities for Year 2.
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