Canadian Businesses Need More Resources for Innovation

Art Sinclair, VP of Advocacy, Greater KW Chamber of Commerce

Art Sinclair, VP of Advocacy, Greater KW Chamber of Commerce

For the past five years, the Canadian Chamber of Commerce (CCC) has published its annual Top 10 Barriers to Competitiveness.

The 2016 edition is reflective of some major economic shifts impacting domestic and international markets.

A priority issue in past reports has been the shortage of skilled trades, a challenge for businesses of all sectors in all regions of Canada.

While this predicament remains, it is not dominating the national business agenda in 2016.

At the top of the list in the CCC report is tax barriers and policies that restrict business growth. As an example, under current rules companies are penalized when their incomes reach $500,000 as they move from the 11 per cent small business tax rate to the 15 per cent corporate rate. The best thing that can happen to a small business, according to the CCC, is to grow into a big business with more resources to hire, invest and innovate.

The ability of Canadian companies to compete globally is now being determined by their ability to innovate, adapt and develop new business models. Building on its leadership in traditional sectors, Canada must now generate economic growth through new processes and services. Here in Waterloo Region, we are seen as national leaders in this regard.

Business and public institutions must partner and invest in innovation to drive success. Since 2010, federal research and development expenditures have fallen by 12 per cent while their proportion of GDP has dropped by 26 per cent.

Canada needs to reinvest in an innovation ecosystem that supports the capability of business to rapidly respond to change.

Skills training, though not dominating the agenda, is still important. Robotics and artificial intelligence are changing the workplace and increasing the demand for highly-skilled workers.

Unfortunately, half of Canadians do not possess the levels of literacy, numeracy and digital problem solving skills they need to function in the modern economy.

Canada needs a plan to ensure we have the people for the jobs that businesses create. Again, our community is well-positioned to lead based on the strengths of Conestoga College, Wilfrid Laurier University and the University of Waterloo.

Finally, the world views Canada as a great place to live but not to do business, and Canada has not been effective in changing those perceptions.

A strong business brand would encourage foreign direct investment into Canada, increase awareness of Canadian export products, and support the tourism industry. All levels of government must increase efforts to improve our collective brand through investment promotion. The new Waterloo Region Economic Development Corporation is one step our community is taking in this regard.

Overall, the message is that Canadian business must be ready for the challenges of changing global markets. Innovation is a key factor in our future success.