Canada is becoming less competitive on the world stage, according to a report released today. The “Global Competitiveness Report 2006-2007” released by the World Economic Forum, whose Canadian partner is the Institute for Competitiveness & Prosperity, shows Canada moving down in the rankings over 2005’s results in both of its competitiveness indices.

On the “Business Competitiveness Index,” Canada moved down to 15th from 14th. On the “Global Competitiveness Index,” Canada also fell, to 16th from 13th.

“These annual indices help Canadians determine trends in the competitiveness of our economy versus our global competitors,” said Roger Martin, chairman of the Institute for Competitiveness & Prosperity and Dean of the University of Toronto’s Rotman School of Management. “What they indicate is that Canada is not living up to its full potential in economic performance.”

The “Business Competitiveness Index,” developed by Michael Porter, Director of the Harvard Business School’s Institute for Strategy and Competitiveness, draws on economic data and surveys of over 11,000 business leaders in 121 economies around the world to develop indicators that measure the set of institutions, market structures, and economic policies supportive of high national prosperity.

The top ranking countries in the global Business Competitiveness Index were:
1. United States
2. Germany
3. Finland
4. Switzerland
5. Denmark

Top ranking countries for the Global Competitiveness Index were:
1. Switzerland
2. Finland
3. Sweden
4. Denmark
5. Singapore


Martin views the one-year drop in rankings as part of a longer term trend that indicates Canada is not fulfilling its full economic potential. “In 1998, Canada stood sixth in this ranking of our business competitiveness,” said Martin, “and in 2001 we stood 11th. Over the years we’ve drifted down in the rankings as countries like Norway and Japan have stepped up their competitiveness.”

On a more positive note, Martin noted that among the larger economies – those with half of Canada’s population or more – Canada actually improved its ranking from 8th to 6th, moving past France and Australia. Among these larger countries and economies Canada has consistently ranked between 6th and 8th over the past five years.