Montréal, September 11, 2018 – Thus far, negotiations to renew the North American Free Trade Agreement (NAFTA) have focussed mainly on trade disputes between Canada and the United States. But in fact, the concerns in the headlines may be overshadowing a much more fundamental problem: the competitiveness of Canadian firms. This is one of the key findings of the latest report issued by the Centre for Productivity and Prosperity – Walter J. Somers Foundation (CPP).

To better answer these questions, the CPP set out to evaluate the competitiveness of Canadian industries. Using an innovative approach based on the relative evolution of productivity and production costs in Canada and the United States, the authors examined the changes in the relative competitiveness of the 34 main industrial groups making up the Canadian economy.

Generally speaking, the results show that productivity gains in Canada were too weak for industries here to remain competitive when the Canadian dollar began rising in the early 2000s. Many sectors had not invested enough in improving their productivity, and hence now appear vulnerable to new trade barriers, even though the relative weakness of the loonie currently gives them a significant trade advantage.

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