Investment

Canada needs to Own the Podium of international investment

Published

5 years ago

December 22, 2019

Craig Wright is the chief economist at the Royal Bank of Canada

You cannot stand out when you are in the middle of the pack. But that’s where Canada finds itself as we enter the 2020s and perhaps the most competitive, and disruptive, economic race we’ve seen.

According to the 2019 Wealth Opportunity Index, which was produced by the Economist Intelligence Unit for RBC Wealth Management, Canada stands in seventh place among 15 high- and middle-income countries vying for global capital. The index measures economic fundamentals, market dynamics, innovation and risk, and should matter to the prosperity of every Canadian as it shows what we’re up against in the competition for capital that’s needed to build infrastructure, launch and grow businesses and finance our indebted public sector.

First, some good news. In a world where geopolitical tensions undermine the confidence of global investors, Canada is viewed as a safe harbour – ranking near the top of the index’s risk category. That’s in large part owing to our stable macroeconomic, financial and political climate. We must continue to play to this strength as we compete for foreign investment.

Canada also fared well in the market dynamics category, which examined a country’s attractiveness and activities that are contributors to wealth generation. Yet much of our success stemmed from our robust real estate markets – a precarious advantage given the cyclical nature of property values.

These strengths were offset by some troubling signs. Our macroeconomic and demographic drivers – including real gross domestic product (GDP) growth – ranked us in the bottom half in the economic fundamental categories.

Moreover, Canada’s ability to generate new businesses, products and services, as well as produce research and development was also a clear vulnerability. Our predisposition to generate wealth through innovation lags behind patent-producing economies found in Japan, Singapore, the United States and Hong Kong. Other countries, notably China, benefited from strong productivity growth.

None of these results should come as a surprise, but they do point to the need to address some of the burdens that weigh us down in the race for international investment. We can improve our standing by:

Reducing interprovincial trade barriers. By doing so, the International Monetary Fund estimates a lift of 4 per cent in real GDP per capita.
Better leverage our well-educated labour force. We have one of the world’s best education system, which attracts hundreds of thousands of new Canadians, and yet we don’t do enough with it to drive economic and social innovation.
Explore new trade agreements in South Asia, the Middle East and Latin America, while also helping business and entrepreneurs take advantage of the deals we’ve signed with Europe, Asia-Pacific countries and most recently, our North American neighbours.
Encourage business and investors to ramp up research and development (R&D) in emerging sectors such as renewable energy and clean technologies for traditional industries.

We also must seize new challenges that will impact our ability to create wealth in the coming decades. For instance, millions of Canadians will need a set of skills for multiple roles, rather than a single career. But educators, employers and policy makers have yet to adjust fully for this skills economy. This also includes helping those at risk of losing their jobs through automation.

A recent RBC report suggests there are about one million Canadian workers in this situation who possess many of the vital skills required for the health-care sector. Helping them make the transition could be an important remedy for a sector that is expected to exceed the overall economy in job creation in the coming years.

Getting this right would represent an important step forward in creating the kind of economy we need to generate greater opportunity and wealth. We entered the 2010s with a national commitment to Own the Podium at the Vancouver Winter Olympics and it worked. The same determination can guide us into the 2020s, to own the podium of international investment and, in turn, stand out from the pack.

Let’s block ads! (Why?)

Source link

Investment

Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

Published

6 days ago

November 6, 2024

Anne Joseph

NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

Source link

Investment

S&P/TSX composite up more than 100 points, U.S. stock markets mixed

Published

4 weeks ago

October 16, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link

Economy

S&P/TSX up more than 200 points, U.S. markets also higher

Published

1 month ago

October 11, 2024

Anne Joseph

TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Source link