Successive Canadian governments have claimed that trade agreements like the Trans-Pacific Partnership were necessary to build Canada’s economy. Long-standing concerns about the impact on labour standards, environmental regulations and the ability of federal and provincial governments to engage in economic development have been dismissed.
Recently, however, a new concern has emerged.
Work by economists like Mariana Mazzucato has led to growing recognition that many of the key innovations that fueled economic growth were funded by governments. A new report by the Broadbent Institute, More Courageous Bets and Equitable Returns: Challenging Perceptions about Public Investment in Innovation looks at what Canadian governments should be doing differently.
A Globe and Mail Business journalist points out that one of the biggest reasons for Apple's success is technology whose development was funded by the United States government. Apple products like the iPhone or iPad are dependent on publicly funded technology like the lithium battery or liquid crystal display.
Ironically, the use of the Temporary Foreign Worker Program for one of the people being trained to replace Canadians employed by RBC is just the tip of the iceberg.
The impending layoffs of technology workers at RBC show how easily Canadian companies can outsource jobs to other countries and how widespread it has become. It has also made it clear how, instead of discouraging companies from moving jobs out of Canada, government policies make it easier.
In a recent opinion piece, Dr. Feridun Hamdullahpur, president and vice-chancellor of the University of Waterloo, suggested three measures to improve innovation in Canada. All require involvement of government or public institutions.
In its report card, “How Canada Performs”, the Conference Board of Canada gave Canada a “D” for innovation. It found Canada ranked 14th out of the 17 countries surveyed and lack of innovation was harming the economy.
What makes the report card surprising is that the Canadian government spends more on research and development, as a percent of GDP, than any of the other countries surveyed. The problem is how the money is spent.
Post and article on the problems with using tax credits to support innovation in the high tech sector, the benefits of providing grants or loans, and issues that would need to be addressed with a grant or loan program. (http://www.progressive-economics.ca/2007/05/28/how-can-the-feds-support-...)
