Canada’s productivity problem runs deep and ripples far in the economy

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Canada’s five-year performance in the TSX at 9.84 per cent annually compares poorly with the S&P 500′s 15.19 per cent

Andrew Auerbach is the chief executive and co-founder of Delisle Advisory Group, an independent wealth management firm serving high-net-worth families.

My message is not about what any political party has or has not done. My message stems from looking at the numbers, something I like to do as a chartered financial analyst and former bank executive. Numbers tell an objective story and right now, it’s not a strong one for Canada’s economy, beginning with the most important challenge we face: Canada’s productivity problem.

We’ve also lagged in innovation, of which artificial intelligence is only one example. AI is an unstoppable innovation at this point, and the United States has stepped up as its leader. Again, numbers don’t lie and thein market capitalization of one American AI company alone in under a year is five times greater than the entire market capitalization of our largest company in Canada, Royal Bank, a company that’s been around for 160 years.

The composition of each country’s top 10 by market cap is even more interesting. In Canada, our six banks dominate the market, with four banks representing 43 per cent. In contrast, not one bank is in the American top-10. JP Morgan Chase, widely recognized as the most respected bank in the world, doesn’t even appear on that list.

 

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