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Competitiveness Challenges Facing Canadian Industries

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  • Someshwar Rao
  • Jianmin Tang

Abstract

The objective of this paper is to evaluate the competitive position of Canadian industries vis-à-vis their American counterparts. Our results suggest that recent good economic news and a strong trade performance mask Canada's competitiveness difficulties. The export surge and a big increase in the trade surplus were largely the result of a strong US economy and a large real depreciation of the Canadian dollar vis-à-vis the US dollar, but were not due to any improvement in underlying competitiveness. As a matter of fact, Canada lost substantial ground to the United States in productivity, the fundamental determinant of the underlying competitiveness. Canada's relatively weak performance in terms of capital accumulation, innovation, highly skilled labour, greater importance of small-sized firms in the economy and a slower shift to New Economy industries all have contributed to its productivity and competitiveness difficulties.

Suggested Citation

  • Someshwar Rao & Jianmin Tang, 2004. "Competitiveness Challenges Facing Canadian Industries," Canadian Public Policy, University of Toronto Press, vol. 30(4), pages 365-380, December.
    • Handle: RePEc:cpp:issued:v:30:y:2004:i:4:p:365-380
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    References listed on IDEAS

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    1. Someshwar Rao & Jianmin Tang & Weimin Wang, 2002. "The Importance of Skills for Innovation and Productivity," International Productivity Monitor, Centre for the Study of Living Standards, vol. 4, pages 15-26, Spring.
    2. Baldwin, John R., 1997. "The Importance of Research and Development for Innovation in Small and Large Canadian Manufacturing Firms," Analytical Studies Branch Research Paper Series 1997107e, Statistics Canada, Analytical Studies Branch.
    3. McFetridge, D., 1995. "Competitiveness Concepts and Measures," Gouvernement du Canada - Industrial Organization 5, Gouvernement du Canada - Industry Canada.
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    Cited by:

    1. David Zarifa & David Walters, 2008. "Revisiting Canada's Brain Drain: Evidence from the 2000 Cohort of Canadian University Graduates," Canadian Public Policy, University of Toronto Press, vol. 34(3), pages 305-320, September.

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