Canada needs more corporate green investment

Significance

Canada’s gross fixed capital formation (GFCF), meaning investment in tangible fixed assets, shows higher growth in investment by government and households since 2000 than by the corporate sector. Canada needs greater corporate GFCF to increase productivity and competitiveness, which have dropped off in recent decades compared with many peer economies.

Impacts

• For decades, much GFCF has gone into the fossil fuels sector but some is now shifting to support decarbonisation initiatives.
• Canada’s manufacturing sector is only about 0.2% of global GDP, highlighting the importance of supply-chain linkages to scale up.
• North American trade and investment linkages will remain paramount for Canada despite efforts to diversify products and markets.