Canada continues to slide down the ranks of the world's top economies and is a "chronic laggard in key areas, notably productivity and investment," according to the Conference Board of Canada's latest global report.
Dropping investment spending and sub-par productivity growth pulled Canada down to the No. 12 spot from sixth place last year and third in 2003, the board said last week.
"Canada runs the risk of squandering its abundant endowments and opportunities," Conference Board CEO Anne Golden said in a release.
"Our report card shows that Canada's relative performance continues to slip, and other countries are not standing still."
Canada earned top 12 rankings in all six categories of the board's global survey, but lost ground in four, including a decline to 12th from sixth in the economy category.
"Even in areas such as health and society, where we believe that we have created a strong social fabric, our public record does not measure up to our international brand," Golden said.
In its annual Performance and Potential report, the board rates the world's 24 richest economies using a wide variety of indicators. Norway and Ireland led the economy rankings while Germany, Japan and the United Kingdom failed to crack the top 12.
Canada's most glaring - and consistent - failure is its inability to increase productivity. Its 1.1-per-cent increase in labour productivity in 2004 puts it at the tail end of the top 12 economies, with Iceland, Sweden and Norway all posting better than four-per-cent gains.
"Increasing productivity - a theme explored in previous reports - is central to our future well-being," the report said.
An overriding message in this year's report is Canada's need to invest in research and development to make the economy more innovative. It ranked fifth in the innovation component, down from fourth last year.
Canada's strongest performance is in education, a third-place ranking, bolstered by the fact 43 per cent of adults completed a college diploma or university degree, the best rate among all countries.
This comes despite a decade of falling public spending.
Ten years ago, Canada spent 6.2 per cent of its gross domestic product on education, just behind Norway. It now sits in the 14th spot at 4.9 per cent of GDP.
"Although more spending may not necessarily produce better outcomes, the other countries in the overall top five - Norway, Finland, Sweden and Denmark - all invest more in education," the report notes.
The report also said that organizational policies and practices must change now to offset economic and social repercussions of an aging society.
"Keeping older workers in the workforce is one effective way of dealing with labour shortages," the report said.
Some countries - such as France - are subsidizing women to have more babies, but the cost of raising and educating a child in a developed country far exceeds such subsidies, Golden said.
