Business investment per worker in Canada fell from 87.3 per cent of the U.S. level in 2014 to 54.0 per cent in 2024, according to a new study by the Fraser Institute.
The report says inflation-adjusted business investment per worker declined in Canada over the 10-year period while increasing in the United States, widening the gap between the two countries on a measure the study identifies as an indicator of business capital spending.
The study found business investment per worker in Canada fell 18.8 per cent, from $20,310 in 2014 to $16,493 in 2024, the latest year for which data were available. It defines business investment as spending on equipment, machinery, factories and new technologies, excluding residential homebuilding.
During the same period, inflation-adjusted business investment per worker in the United States increased 31.3 per cent, rising from $23,263 to $30,555 in Canadian dollars.
The Fraser Institute said the comparison shows Canada moved from investing at 87.3 per cent of the U.S. level in 2014 to 54.0 per cent in 2024.
"The economic well-being of Canadians depends in large part on the strength of business investment, so poor investment performance is bad news for workers," said Tegan Hill, senior economist at the Fraser Institute and co-author of Comparing Business Investment per Worker in Canada and the United States, 2007-2024.
The report says business investment contributes to worker productivity by increasing access to capital such as equipment, machinery and technology.
"More investment per worker means more productive workers, which in turn means higher living standards," Hill said.
The study also found considerable differences among provinces between 2014 and 2024.
According to the report, five provinces recorded declines in inflation-adjusted business investment per worker over the period: Alberta, Saskatchewan, Manitoba, Nova Scotia, and Newfoundland and Labrador. The declines ranged from 13.3 per cent in Nova Scotia to 54.9 per cent in Newfoundland and Labrador.
New Brunswick posted the largest increase, with business investment per worker rising 24.3 per cent during the decade, while British Columbia, Ontario, Quebec and Prince Edward Island also recorded gains.
The report's provincial figures show Alberta's business investment per worker declined from $56,401 in 2014 to $27,294 in 2024. Saskatchewan fell from $48,715 to $33,386, while Newfoundland and Labrador dropped from $53,779 to $24,241.
In British Columbia, business investment per worker increased from $16,416 to $17,459. Ontario rose from $12,096 to $13,827, Quebec increased from $11,147 to $13,584, and Prince Edward Island climbed from $8,494 to $9,633. Manitoba declined from $18,126 to $13,078, while Nova Scotia fell from $10,298 to $8,926. New Brunswick increased from $9,895 to $12,302.
The Fraser Institute described itself as an independent, non-partisan Canadian public policy think tank. The organization said the study examines business investment per worker in Canada and the United States between 2007 and 2024 using the latest available data.
"The waning ability to attract business investment in Canada should sound alarm bells and prompt policymakers to enact immediate policy reforms to make Canada a more attractive and hospitable destination for investment."