Jerome Gessaroli: Solving Canada’s competitiveness problem with investment

Canada has been “using subsidies as a substitute to help solve our competitiveness problem,” says economist Jerome Gessaroli. He called this approach “wrong,” “inefficient,” and “expensive.” Gessaroli offered his observations as he reflected on the state of investment in Canada, in the wake of the recent high-profile investment summit the federal government hosted in Toronto. He said the summit was a good idea, but its impact will depend on whether it actually helps advance some projects that might otherwise not have made it across the finish line. For years, business investment in Canada has been weak, productivity growth has lagged, and affordability has suffered as a result. So, what’s been holding investment back? To unpack this question, Gessaroli, an MLI senior fellow and former professor of economics at the BC Institute of Technology, joins Inside Policy Talks. He tells Peter Copeland, acting director of domestic policy at MLI, that in recent years Ottawa has been too quick to use taxpayer money to paper over Canada’s issues with attracting capital for key projects. “What government often classifies as a market failure is not a market failure. It's a policy failure,” says Gessaroli.