First, the good news.
I am a Canadian, and I think Canada is the best country in the world. My bias may be showing in calling Canada the best, but there is a lot of evidence to indicate that Canada is excellent.
Money alone does not ensure a good life. Health, longevity and education also contribute. These and other elements, in addition to income, are components of the OECD Better Life Index. Out of a maximum score of one, Canada was at 0.93, ranking 16th among the countries measured on these factors. However, in 1995, we were number one.
Canada still scores above the OECD average in secondary school completion and literacy, math and science levels among our young people. We live longer and are more likely to have someone to turn to in times of need.
Turning to the environment, Canada does very well indeed. Using the PM2.5 measure, the air in Canada contains 7.1 micrograms per cubic meter, about half the OECD average of 14. Almost all Canadians (90 percent) are satisfied with their water quality, which is above the OECD average. But we still need to do something about the remaining 10 percent.
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On overall life satisfaction, Canadians gave themselves seven out of 10, just above the OECD average of 6.7. Given our performance on so many of the indicators, we wonder why it was not higher.
Canada is the 10th largest economy in the world. When we look at per capita income, we rank 20th, although this rises to 16th when we adjust for purchasing power parity. We are the fourth richest country in natural resources. The world sees us as an energy superpower, given our abundant oil, natural gas and hydropower.
In Canada, 70 percent of people between 15 and 64 have paid jobs compared to 66 percent in the OECD, and only three percent of Canadian employees are burning themselves out working very long hours compared with the OECD’s 10 percent.
Now for the bad.
In so many dimensions, Canada is wealthy, but we are like the proverbial rich child born with a silver spoon in their mouth who then does nothing to enhance or develop their inheritance. Our productivity (output per hour of work) is about 20 percent lower than in the United States, so, therefore, is our income. This gap has tended to widen rather than narrow over time.
To determine why and how this low productivity is threatening our comfortable lives, we turn to the Economic Complexity Index. This index looks at know-how – the amount of knowledge in people’s brains, not on the Internet – and how it is used in the number and complexity of products produced and traded.
Despite our high employment and income, our healthy and well-educated population and our plentiful energy and very rich resource base, Canada ranks 43 among 133 countries on the ECI. Our position in the rankings is falling and has been doing so over the last five years. Countries like Panama and Bulgaria are now more economically complex than we are. Unless we start doing something different, growth in Canada is projected to hover around 2.4 percent for the next 10 years. What can we do to improve this prospect?
First, we need to broaden and diversify our industrial base. Canadians should be blushing that we have to import all our plate glass when even Venezuela produces it. We need to add more value to our exported products. Right now, we import pasta from Italy and paper from China made from Canadian wheat and wood.
We need to develop and produce a wider variety of capital goods that both Canada and the world need. One example would be producing and exporting, rather than importing, the machinery and equipment for controlled environment agriculture which will soon be feeding the world.
We need to raise our geographic sights. Most Canadian firms do not think of exporting or expanding outside the country; those that do often limit themselves to the U.S. market. There is a much broader world out there that would value what Canada could provide if it were made available to them.
There are two areas that the ECI does not focus on. One is services, an ever more critical part of our economy. We export education. International students add more to the Canadian economy than softwood lumber sales. We produce, enjoy and export entertainment. BC’s video and live performance sector employs more people than forestry and mining combined. The potential for technologies such as AI is unlimited.
Finally, being resource-rich need not lead to a resource trap. Certainly, value can be added to resources before they are exported. But selling resources like energy when the world needs them contributes to economic well-being and provides the means to enhance other sectors and meet other needs, including those of the environment. One reason for Canada’s low ranking and slow growth is that we have not developed the infrastructure to bring our energy resources to market. Hence, we lack the means to develop alternative energy and to broaden our industrial base.
Dr. Roslyn Kunin is president of the Vancouver Institute and has been chair of the Vancouver Stock Exchange, WorkSafe BC, and Haida Enterprise Corporation. She has also been on the boards of the Business Development Bank of Canada (BDC) and the National Statistics Council.
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