Briefing

Canadian competitiveness in an ‘intangibles’ economy

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Intellectual property (IP) and data account for an increasing share of economic output and growth, but Canada lags behind its peer economies, according to a report from the Public Policy Forum. The Toronto Stock Exchange has an intangibles-to-market-cap ratio of 70 per cent, compared to the U.S. S&P 500’s 91 per cent, and 77 per cent for the top U.K. and French public markets. (The Logic)

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Talking point: Competitiveness is traditionally gauged via measures like productivity growth, the state of national infrastructure and the tax and regulatory burdens on businesses. While those factors remain important, the report argues that Canada needs more hands-on policy-making to create “innovation assets” like data and IP. It recommends the government reduce foreign tech companies’ access to tax incentives and university researchers, introduce data governance policies, buy more from innovative Canadian firms and review foreign direct investment and antitrust rules. Meanwhile, RBC CEO Dave McKay prescribed policies on data and increased IP exports as fixes for Canada’s worsening competitive position at the bank’s annual general meeting; he also said we need more pipelines.