Economists Sound Alarm Bells on Canada's Slipping Economic Competitiveness

Economists from major Canadian banks like Scotiabank and BMO are voicing deep concerns about Canada's declining productivity and competitiveness. This could negatively impact Canadians' standard of living long-term.

Canada's public sector payrolls have grown significantly in recent years, now accounting for 17% more federal jobs since 2016. This expansion of government is correlated with weaker productivity.

Foreign investors are selling Canadian stocks and buying fewer of them, signaling a lack of confidence in Canada's economic future. Last year saw record outflows.

There are reasons for optimism though - wage growth leaves room for productivity gains after decades of globalization and automation, and underperforming bank stocks drove much of the foreign selling.

With advantages like an educated workforce and commodities, Canada should be able to address its competitiveness issues. But economists' warnings should be heeded.