The productivity – foreign investment link

If you want another reason why Atlantic Canada has to get a whole lot better at attracting foreign firms, Statistics Canada has a good reason for you. According to a study released today, foreign-controlled plants accounted for most of the growth in labour productivity in the Canadian manufacturing sector during the 1980s and 1990s. During the 1990s, US-controlled plants alone accounted for about 45% of growth in Canada’s labour productivity.

Investment equals jobs and increased productivity.

Sounds like a bad idea. We should stick to growing our local firms.

Study: Impact of foreign ownership on growth in productivity
Statistics Canada
http://www.statcan.ca/Daily/English/051205/d051205a.htm

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0 Responses to The productivity – foreign investment link

  1. Anonymous says:

    Keep in mind that after the free trade agreement the reason that american firms accounted for so much labour growth is there was a massive buy up of canadian companies. There was also a corresponding massive exodus of canadian companies to the southern US to compete. As well as a massive number of bankruptcies.

    Coincidentally enough we see an almost parrallel situation just after 1867 when ontario and quebec companies competed and virtually replaced New Brunswick companies. While the whole issue is a huge one and I certainly see no reason to turn away foreign investment, we can note that the massive investment during the first decade of Canada’s life in New Brunswick triggered a century of dependance.

    If you look you can notice that Canada is virtually becoming a ‘maritime’ province of the US, keeping afloat by buying off automakers no matter the price. I’ll leave with my favourite quote again:

    “Branch businesses may be regarded as the emissaries of the metropolis, advancing its economic interests and consolidating its empire throughout the hinterland” LD McCann

  2. David Campbell says:

    That may be why the World Bank is now advocating that multinationals invest in local companies while leaving the majority control of those firms local. I simply state we need our ‘share’ of foreign direct investment. If the tight wad local entrpreneurs would let in some outside capital, that would achieve, in part, my objective. But New Brunswick has the lowest percentage of publicly traded companies and the lowest percentage with outside private capital investments.

    We cannot grow this economy in a significant way without investment. And ACOA and piddly provincial government ain’t gonna get it done.

    So, I’ll take ‘greenfield’ investment (new companies moving in) or investment into our local companies.