Business investment per worker fell 20% between 2006 and 2021

Canadian business investment per worker fell by 20% over a 15-year stretch, new research by Statistics Canada shows.

The report finds for every worker, businesses invested $628.80 less in their companies in 2021 than they did in 2006.

The decline was more significant in large and medium-sized companies and foreign-controlled businesses.

Canada is struggling to increase labour productivity amid low business investment, an issue that has been raised frequently by business groups and economists in recent years.

Capital investment, which refers to spending on everything from real estate to machinery, helps businesses grow and make their employees more productive.

The report says the slowdown in investment is in part due to to lower competition and a shift toward intangible assets, such as brand equity and patents. 

National statistical agencies do not record many of these assets as investments, the report notes.

It attributes nearly one-third of the drop to declining entry rates, or the number of new companies starting up by industry.

In a news conference earlier this month, Finance Minister Chrystia Freeland weighed in on the issue of business investment and made a plea directly to CEOs to spend more on their businesses.

“We believe in you. We want strong Canadian-headquartered companies in this country,” Freeland said. “We need you to be investing in the productive capacity of this country, whatever sector you’re in.”