Canadian Manufacturing

Bureaucracy, lack of innovation hurt Canada as place to do business

Have been ranked top problematic factors for past five World Economic Forum surveys

OTTAWA—As Canada’s standing in global competitiveness rankings continuing to wane, it seems a lack of innovation and too much red tape continue to be barriers for doing business in the country.

In an executive opinion survey for the World Economic Forum, Canadian business leaders see the usual suspects—inefficient government bureaucracy and a lack of innovation—as the main obstacles to doing business in Canada.

“Canada is generally a good place to do business, but poor innovation performance is hindering our competitive potential,” Douglas Watt, director of organizational effectiveness and learning research at the Conference Board of Canada, said in a statement.

The Conference Board administered the survey in Canada.

“Firms in Canada need a business environment that gives them the capacity to innovate without facing undue barriers in bringing new innovations to market,” Watt continued.

According to the think-tank, Canadian business leaders indicated that the five most problematic factors for doing business were:

  • inefficient government bureaucracy;
  • insufficient capacity to innovate;
  • limited access to financing;
  • inadequately educated workforce; and
  • tax rates and tax regulations.

Overall, 16.4 per cent of Canadian business leaders identified inefficient government bureaucracy as a problem.

The only country that ranked this factor as frequently as in Canada was Italy, according to the survey results.

An insufficient capacity to innovate was identified as a problem by 15.1 per cent of Canadian business leaders.

Two items, “inefficient government bureaucracy” and “access to financing,” have been ranked by Canadian business leaders as top problematic factors for the past five Executive Opinion Surveys.

In contrast, tax rates and restrictive labour regulations ranked high among the most problematic factors between 2008 and 2010.

In 2011 and 2012, tax rates and labour regulations dropped in importance as a problem for doing business.

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