Canada’s economic landscape is facing a crucial moment. As the world grapples with uncertainty, shifting global dynamics and a productivity crisis, the role of our cities has never been more vital. The success of Canada’s major city regions isn't just about urban development—it's about ensuring the economic security of our entire country. These cities are the engines driving innovation, productivity, and prosperity. But without strategic support, Canada risks falling behind in a competitive global economy.
In recent years, the flow of investment from multinational companies, often referred to as Foreign Direct Investment (FDI), has slowed significantly. According to the OECD, global FDI dropped by 7% in 2023, marking a continued decline that remains below pre-pandemic levels. This decrease in global investments is a red flag for Canada's economic stability, particularly as even leading economies face record-low inflows. Compounding this challenge, Canada's labor productivity ranks 18 out of 36 OECD countries, lagging behind nations like the United States, Germany, and Australia. The country's aging workforce has reduced labor force growth from 1.2% to 0.7% over two decades, further limiting productivity gains. The ripple effects of this downturn are profound, but the solution lies within our cities.
Canada's city regions are the boots on the ground, serving as barometers for economic health and as thought leaders in identifying and addressing challenges. Major cities in Canada act as dynamic entry points for multinational companies entering the Canadian market, fostering innovation in cutting-edge fields like artificial intelligence and green technologies. These city regions have the potential to drive Canada’s productivity and secure our place in the global economy, but only if they are empowered to do so.
Canada is a global leader in innovation, with key industries thriving in cities across the country. For instance, the AI sector has a major presence, with companies like Google, IBM, and Microsoft generating billions of dollars and driving advancements in supply chain innovations through initiatives like the Scale AI supercluster. Meanwhile, Canada's green technology sector, particularly in hydrogen fuel cell production, has gained international recognition and attracted major companies. Continued investment and strategic support can solidify Canada's position as a world-class innovation hub, fueling sustainable economic growth.
To maintain and enhance Canada's competitive edge, we need comprehensive policies that remove bureaucratic red tape and provide the necessary financial and regulatory support. This support is particularly crucial for city regions, which are already adjusting to new challenges but are constrained by a lack of resources. Investing in cutting-edge infrastructure, such as research centers and digital infrastructure, is vital for attracting high-tech industries and bolstering Canada's economy. This support is vital for city regions to strengthen their promotion efforts, we can boost their visibility and attract investments.
The urgency cannot be overstated. In a landscape where other nations are aggressively reforming to attract global investments; Canada cannot afford to be complacent. Empowering our city regions can address the current economic insecurity and lay the groundwork for a more resilient future. This means not only retaining our competitive edge but also driving the innovation necessary to solve today’s complex challenges.
Now is the time to act. As global competition intensifies and economic uncertainty looms, a collaborative effort will be crucial. Strategic investments and support are vital to equipping Canada's city regions with the right tools. By doing so, these regions can become the driving force behind our national prosperity
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