third area for improving productivity. the need for investment 4 / 6 bis - central bankers'speeches when you compare canada's recent productivity record with that of other countries, what really sticks out is how much we lag on investment in machinery, equipment and, importantly, intellectual property. the global economy continues to change rapidly, and in many sectors, it's not machinery and equipment that are key - it's investment in intellectual property. increasingly, companies need to own or have the rights to patents that will allow them to compete by adopting productivity - boosting processes. weak investment has been a problem in canada for a long time. you can go back 50 years and find a persistent gap between the level of capital spending per worker by canadian firms and the level spent by their us counterparts. however, the situation has become worse over roughly the past decade. while us spending continues to increase, canadian investment levels are lower than they were a decade ago. economists and policy - makers across the country have worked hard to understand the root causes of why canadian businesses seem reluctant to invest. at the bank, we are constantly talking to companies, asking them about their challenges and opportunities. our business outlook survey consistently shows that companies say they plan to increase their spending on machinery and equipment. but we haven't seen it in the data, at least not yet. adding to the puzzle is the fact that canada has many advantages that should lead to higher investment and productivity. we have a well - educated labour force. we have a strong research culture at our universities that is driving advances in technology. and we have trade agreements that give us better access to global markets than any country in the world. to understand the lack of investment, it might be helpful to look at the incentives that companies see. if firms have high profits, high margins and limited competition, they may not feel as much pressure to invest. statistics canada published a report last month that draws a link between decreasing competition within canada and declining investment levels. 2 another challenge for companies may be a lack of policy certainty. in some cases, incentives or regulatory approaches can change from year to year. we have also heard from companies that are naturally wary of a regulatory approval process that can be both lengthy and unpredictable. and, of course, the past few years have been a challenging time for making investment decisions. the pandemic caused tremendous levels of instability and uncertainty. a backdrop of global trade tensions is certainly not helping matters. more recently, we've

carolyn rogers : time to break the glass - fixing canada's productivity problem remarks by ms carolyn rogers, senior deputy governor of the bank of canada, to halifax partnership, nova scotia, 26 march 2024. * * * introduction good morning. canada's economy was built by trade and immigration. halifax is not just a key port - it has also been the landing spot for countless new canadians. so i'm glad to be here, speaking to a group like the halifax partnership, which is dedicated to helping canadian businesses grow and thrive. we've just passed the fourth anniversary of the start of the covid - 19 pandemic. it's been four difficult years. beyond its human toll, the pandemic upended economies around the world and sparked the biggest global inflationary episode in decades. this led central banks - including the bank of canada - to raise interest rates sharply so that we could get inflation under control. for the past two years or so, the bank's governing council has focused on restoring price stability. that's almost all we've talked about in our speeches. and we've heard directly from canadians who have struggled with inflation and who are feeling the impacts of higher interest rates. the good news is that monetary policy is working, and inflation has come a long way down. we're not all the way back to target, and we know we need to finish the job. but we have made a lot of progress. and so it's a good time to reflect on how the economy has changed in canada and around the world and to think about what those changes mean for the future. when we look ahead, we see a future where inflation may be more of a threat than it has been over the past few decades. we know that many of the forces that helped create a benign environment for inflation in the past, such as globalization, are going to fade away, or even reverse. we know that changing demographics and the economic impacts of climate change will tend to put upward pressure on prices. persistent global trade tensions also raise the risk of future inflation. so, at the bank of canada, we're turning our thoughts - as well as our speeches - to this future. and today i want to talk about a topic that is critical to our ability to navigate a future that's more prone to inflation : productivity. productivity is a way to inoculate the economy against inflation. an economy with low productivity can grow only so