Canada falls further behind U.S. in business investment, Fraser Institute warns
A new study from the Fraser Institute shows that Canada's weakening investment climate is threatening long-term prosperity.
Canada's investment gap with the United States has widened dramatically over the past decade, raising concerns about future wages, productivity and living standards, according to a new Fraser Institute study released Thursday.
The report found that business investment per worker in Canada fell from 87.3 per cent of the U.S. level in 2014 to just 54.0 per cent in 2024, the latest year for which data is available. The think tank says business investment is a key driver of worker productivity, higher incomes and long-term economic growth.
Over the 17-year period examined, Canadian businesses reduced real non-residential investment per worker by $852, from $17,345 in 2007 to $16,493 in 2024. Meanwhile, U.S. businesses increased investment by $11,203 per worker, rising from $19,352 to $30,555 over the same period.
The gap accelerated after 2014, when business investment in Canada began to decline while investment south of the border continued to grow. According to the study, Canadians now receive just 54 cents of business investment for every dollar invested per American worker.
The report also highlights Alberta's changing position. In 2014, Alberta led North America with $56,401 in business investment per worker, well ahead of the U.S. average of $23,263. By 2024, however, U.S. investment had climbed to $30,555 per worker, while Alberta was among five provinces that experienced declining investment over the decade. Only Saskatchewan remained ahead of the U.S. average in 2024.
The study's authors argue that Canada's weakening investment climate threatens long-term prosperity because businesses invest in the machinery, equipment, technology and intellectual property that make workers more productive and support higher wages.
"The economic well-being of Canadians depends in large part on the strength of business investment," said Fraser Institute senior economist Tegan Hill. The authors argue policymakers should prioritize reforms that encourage private-sector investment to improve Canada's economic performance.
Sheila Gunn Reid
Chief Reporter
Sheila Gunn Reid is the Editor-in-Chief, Alberta Bureau Chief, member of the board of directors, and host of The Gunn Show at Rebel News. Sheila also serves as President of the Independent Press Gallery of Canada. A mother of three and longtime conservative activist, Sheila is the author of bestselling books, including her most recent release, Independence Blueprint: What Alberta Can Learn From Quebec.
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