Canada’s aging roads and rail systems are leaving the country at a disadvantage when it comes to competing with other nations.
Canada ranks 15th on this year’s Global Competitiveness Report by the World Economic Forum. That’s down one spot from last year and three spots from 2011, when Canada captured 12th place.
Federal finance minister Joe Oliver touted the results, while the head of an Ottawa-based economic think-tank said the performance shows Canada is in the midst of a slow decline.
“We’re a comparatively small export economy in this world and we need to be concerned about our overall competitiveness,” said Daniel Muzyka, president and chief executive officer of the Conference Board of Canada.
“We have high expectations. We want great health care and great opportunities for the next generation. Our ability to be competitive creates the opportunity, the resources and the wealth to do the things we want to do.”
On this year’s list, Canada ranked behind Taiwan and ahead of Qatar.
For the second year in a row, Switzerland won the top spot and Singapore came in second place. The United States, Finland and Germany rounded out the top five.
The World Economic Forum’s report sizes up 144 economies by zeroing in on their productivity and quality of their institutions. The annual survey is based on opinions from 13,000 business executives around the world.
Countries are ranked on 112 indicators in 12 main categories that include institutions, infrastructure, health and primary education, higher education and training, labour market efficiency and innovation.
Canada’s decline comes as the U.S. moved from seventh place in 2012 to fifth in 2013, to third this year. Japan also made progress, jumping three spots to sixth place.
Canada’s fundamentals remain strong. The country ranked seventh in health and primary education and 14th on institutions.
The largest improvement, to eighth place from 12th, came from financial market development. Business executives reported marked improvement in the availability of financial services, financing through local equity markets, and access to loans and venture capital.
Canada also retained its first-place ranking for the soundness of its banking system.
“I am pleased that the World Economic Forum has once again recognized Canada’s banking system as the soundest in the world. Our financial institutions remain well supervised and well capitalized — which instills domestic and foreign investors with confidence in the Canadian economy,” Oliver said in a release.
However, Canada lost points on quality of roads, railroad, and port infrastructure.
Long commute times increase worker stress and decrease productivity, the Conference Board pointed out in a research note. Statistics Canada data shows that residents of the Greater Toronto Area and Hamilton have some of the longest commutes in North America, an average of 32.8 minutes one way, or 5.5 hours per week.
Canada also lost points on higher education training, technological readiness and innovation.
“We need to continue to invest in innovation, increase investment in innovation,” Muzyka said. “We need to start having a discussion about the areas in which we want to create a competitive advantage.”