Canada must address productivity, provide financial aid to students: OECD

By Shakeeb Muhammad
University of Waterloo, Canada

In order to maintain a high level of employment Canada needs to develop many sectors of economy. 

The Paris-based OECD (Organisation for Economic Co-operation & Development) expects the Canadian economy to grow 2.25 per cent this year and 2.5 per cent in 2013 and gave Canada high marks for navigating through the tough global economy of the past few years in its annual country review. But the longer-term outlook isn't good unless it addresses the productivity. 

OECD highlighted the vulnerability of Canadians to a collapse in real estate prices. However, household debt levels appear manageable so far.While per capita incomes are growing, productivity has stagnated for decades, and has actually declined since 2002.

The last year's federal task force report on research and development policies showed that  Canadian businesses spend proportionately less on R&D than their peers in most other developed countries at 1 per cent of GDP. That compares to 2 per cent in the U.S. and 2.5 per cent in Japan, South Korea and most of the Scandinavian countries.

The report also says the government should open up "network industries," such as mobile phones and broadband, to more foreign competition and reduce barriers preventing licensed professionals from moving between provinces.

The OECD said Canada needs to improve the performance of universities by providing more financial aid to students in need, attracting more foreign students, and better distinguishing universities that focus on research from teaching schools.


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