Other measures that build on Canada's comparative advantages could be taken to improve this country's performance in the global economy and attract new foreign direct investment. Canada already has a high proportion of highly skilled workers. It could deepen that advantage by growing this pool of highly skilled people and ensuring they have the right competencies to attract the attention of foreign investors. In the knowledge economy, investments in high valued-added activities are going where top talent can be found. Actions that could be taken include:
• increasing the number of youth who pursue and complete post-secondary education;
• increasing the number of students who complete university degrees;
• increasing the percentage of post-secondary students who pursue business, engineering, science and technical fields;
• attracting large numbers of skilled immigrants and ensuring their credentials are recognized; and
• upgrading the skills of those currently in the workforce.
Government programs to support these actions include stay-in-school initiatives, career counselling for students, and improving the capacity of colleges and universities in critical disciplines. Governments could also improve immigration and credential-recognition processes so that more skilled immigrants are attracted to Canada and, once here, are better able to integrate into the workforce and use their skills to the fullest. Governments could also provide better access to training programs and offer incentives to Canadian employers and workers to improve employability skills.
Canada's rich natural resources have provided a traditional advantage. But access to new resources in Canada has become more expensive, and other countries have opened their doors to foreign investors to exploit low-cost, high-quality resources. As well, the share of global inward FDI attributed to the resource sector has declined, although the decline has been less pronounced in Canada. It is clear that a dominant share of FDI is flowing to tertiary and newly emerging knowledge activities. (See Charts 6 and 7.) Nevertheless, Canada's rich natural resources will still attract FDI if Canada can compete on costs. Ensuring that regulations and standards meet public policy goals efficiently and in a user-friendly manner would help control costs. It is also important to ensure that Aboriginal people are appropriately involved in resource development activities that take place close to or on their lands, so that such investments remain attractive to corporations and to Aboriginal communities.
Without the advantages of large-scale production or low labour costs, Canada's comparative advantage may rest in finding niches. |
The Canadian advantage must also be defined and developed in terms of what this country can produce efficiently and competitively within global supply chains. In general, Canada does not have the large-scale production advantage of the United States or the low labour costs of Mexico, China or other developing countries. It follows that Canada's comparative advantage lies in finding niches. It could develop, for example, an advantage in high-value specialized products that require small production runs, highly skilled labour and advanced technologies. It could also specialize in high value-added business services. In addition, it could expand its capacity in emerging technologies such as life sciences, fuel cells and environmental technologies in order to attract foreign investment in R&D, and it could provide the business environment needed to commercialize at least some of the future applications of these technologies within Canada for North American or world markets.