Canada's Capital Investment Gap
Canada’s capital investment has fallen far behind other developed countries. As a result, our businesses are less competitive and our workers are less productive. In a dynamic global economy we need more capital investment to keep our economy growing.
Capital investments boost the economy over the short-term while laying the foundation for long-term growth. Investments in facilities, equipment, machinery and tools including IT infrastructure are vital to support Canadian workers. These investments raise output, increase wages over time, and increase tax revenues for government.
We need to make it easier for businesses to invest in structures, equipment and machinery that will make our sectors and our workers more productive.
How has Canada's Capital Investment changed?
U.S. tax cuts, bringing the marginal efficient tax rate down to 18.8% (from 34.6%), further eroded Canada's competitive position
Canadian Real GDP is expected to decelerate from 1.6% in 2018 down to 1.4% by the end of 2019
In 2017, the asset finance growth rate was 7.4%—In 2018 it was just 1.1%
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BARRIERS TO INNOVATION
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Weak capital spending jeopardizes Canada’s long-term prosperity, and limits the potential of our economy in high-value added sectors. The problem not only hurts manufacturing and service businesses, but also the natural resources industries on which many regions of the country rely for jobs and opportunity. The anticipated decline in GDP is projected based on lower real residential and non-residential business investment spending, which is an important source of capital investment.
Who We Are
The Canadian Finance & Leasing Association (CFLA) represents the asset-based financing, equipment and vehicle leasing industry in Canada. This industry is the largest provider of debt financing to businesses and consumers in this country after the traditional lenders (banks and credit unions). In 2018, QEDinc estimated that the industry financed $129 billion in new assets for a total of $416 billion in assets financed nationally.
CFLA’s more than 215 corporate members range from large multinationals to national and smaller regional domestic companies, crossing the financial services spectrum from manufacturers’ finance companies and independent leasing companies, to banks, insurance companies, and suppliers to the industry.
CFLA members are key partners with Canadian small, medium, and large businesses and consumers. By facilitating business investment in new productive machinery, equipment and vehicles, the asset-based finance and leasing industry is helping Canada work smarter and raising living standards for all Canadians.