Business innovation has continued to fade despite billions in federal cash: memo

OTTAWA - Spending billions of public dollars over two decades has done little to reverse Canada's long decline in the key economic category of business innovation, the federal government acknowledges in a newly released document.

The self-assessment, contained in a "secret" memorandum to Finance Minister Joe Oliver, underlines how chronically sluggish business innovation remains "of great concern" for Canadian productivity.

"Canada's productivity performance, a key determinant of economic growth, continues to lag significantly behind that of the United States, eroding our relative standard of living," says the October memo, signed by deputy finance minister Paul Rochon.

Federal Budget 2012: Jim Flaherty To Put Business Innovation At Top Of Agenda

OTTAWA - Policy-makers have talked about business innovation endlessly — now the Harper government says it is determined to do something about it.

Prime Minister Stephen Harper's pledge last week to make innovation a key element of the upcoming budget opens the window to the first comprehensive rethink in many years on the way Ottawa doles out more than $6 billion to stimulate research and development, say experts.

And depending on how seriously Harper and Finance Minister Jim Flaherty take to the task, they add, the project has the potential to achieve the lofty goal the prime minister is assigning it: sustaining the economy as the workforce ages and shrinks.

"Canada's choice will be, with clarity and urgency, to seize and to master our future, to be a model of confidence, growth and prosperity in the 21st century," Harper told the attendees at the World Economic Forum in Davos last week.

Improving innovation and competitiveness, however, has been the goal of governments long before Harper came to office, and according to a 2010 measure, Canada still ranks 14 of 17 peer countries.
This despite Canadian governments having been among the most generous in funding for research and development.