Centre for the Study of Living Standards
Centre d’étude des niveaux de vie
Andrew Sharpe (Executive Director/Directeur exécutif
Don Drummond (Chair/Président)
Jack Finlayson
Pierre Fortin
David Green

Board of Directors/Conseil d’administration
Helen Heslop
Michael Horgan
Maureen O’Neil
Richard Van Loon
Lars Osberg
Frances Woolley604-170 Laurier Ave. W
Ottawa, Ontario
K1P 5V5
Telephone : 613-233-8891
csls@csls.ca
www.csls.ca

Explaining Canada’s Fall on the World Bank Doing
Business Index
Press Release - Ottawa, April 1, 2021

The Centre for the Study of Living Standards (CSLS) today released a report entitled “TheWorld Bank’s Doing Business Index for Canada: An Assessment.” Commissioned by Global
Affairs Canada, this comprehensive study identifies the factors that explain the fall in Canada’sranking on the Doing Business Index from 4th in the world in 2007 to 23rd in 2020.

Key Findings of the ReportIn terms of position in 2020, Canada ranked highest in starting a business (3rd), followedby protecting minority investors (7th), resolving insolvency (13th), getting credit (15th),and paying taxes (19th).

Canada ranked lowest in getting electricity (124th), followed by enforcing contracts(100th), dealing with construction permits (64th), and trading across borders (51st).

Between 2007 and 2020, Canada’s ranking declined in nine of the ten pillars. The
exception was paying taxes. The largest fall in ranking was in enforcing contracts (down84 places), followed by trading across borders (43 places) and dealing with construction
permits (32 places). The replacement of the employing workers pillar, in which Canada

ranked highly, by the poorly ranked getting electricity pillar also represented a major fallin ranking (111 places).
The deterioration in Canada’s DBI ranking between 2007 and 2020 took place in three
discrete jumps, each associated with particular development in one or more pillars. The
first jump in 2008-2009 was linked to the trading across borders and enforcing contracts
pillars, the second between 2011 and 2014 was due to the construction permits pillar andthe introduction of the getting electricity pillar, and the third in 2017 was related to theenforcing contracts pillar.

To explain the decline in Canada’s DBI ranking, the report conducts a deep dive on
developments in the four pillars that experienced the largest fall in ranking to identify thespecific indicator or indicators responsible for the fall. The key findings are highlighted below.



The fall in the ranking for the dealing with construction permits pillar was due to theincrease in the number of days needed to obtain a construction permit from 73 days in2012 to 249 days in 2014, driving Canada’s ranking for this indicator from 15 th to 160th.
.
The decline in the enforcing contract pillar was also due to the very large increase in timefor court cases, from 346 days in 2007 to 910 days in 2020, reducing Canada’s ranking
for this indicator from 47th to 160th.

The fall in the ranking for the trading across borders pillar reflects an increase in trading
costs. The cost of exporting a container rose from US$700 in 2007 to US$1,660 in 2009,
with the ranking going from 40th to 130th. The cost of importing a container rose fromUS$850 in 2007 to US$1,785 in 2009 with the ranking falling from 50 th to 122nd. No
explanation is provided for this massive increase on cost, which is inconsistent withoverall price developments. Even with the introduction of new cost indicators for thetrading across borders pillar in 2016, Canada’s ranking on costs remained very poor.

Canada has done poorly in the getting electricity pillar since it was introduced in 2012 to
replace the employing workers pillar where Canada ranked well. This change in pillars
reduced Canada’s overall DBI ranking. The poor performance in getting electricity isexplained by both the number of procedures (Canada ranked 169th in 2012 and 162 nd in2020) and the time needed (Canada ranked 156th and 171st).

The report is posted at http://www.csls.ca/reports/csls2021-02.pdf.
For further information, please contact: Andrew Sharpe Executive Director Centre for the Studyof Living Standards 613-233-8891 andrew.sharpe@csls.ca

The Centre for the Study of Living Standards (CSLS) is a national, independent, Ottawa-based
not-for-profit research organization. Its primary objective is to contribute to a better
understanding of trends and determinants of productivity, living standards, and economic
wellbeing in Canada through research.