Canada should focus on supporting smaller companies and re-working some of its protectionist rules if it wants to close its "stunning" productivity gap with the U.S., the chairman of the country's second-biggest software company said.
The country should make "nuanced" reforms to laws that protect Canadian telecommunications firms and banks from foreign takeovers to spur competition and push Canadian firms to be more global in their outlook, said Tom Jenkins, who served as chief executive officer of Open Text Corp. for more than a decade before becoming chairman in 2005.
With commodity prices lower than they were for much of the past decade and high-paying manufacturing jobs yet to return, Prime Minister Justin Trudeau's government has been trumpeting a shift to economic growth that relies on tech startups and luring investment from foreign companies like Amazon.com Inc. and Microsoft Corp.
The country needs more than talk to spur the government's stated goal of transitioning to an "innovation economy," Jenkins said in a speech at the Canadian Growth Summit in Ottawa. Governments should copy programs in the U.S. that set aside money to acquire products from smaller startups rather than endlessly giving contracts to tech giants, he said. Corporate Canada should invest growing profits back into research and development.
Canadian governments and companies don't start worrying about competitiveness in non-resource sectors until the country finds itself in the bottom of the commodity cycle, he said.
"We don't do some of these hard things, quite simply because we don't have to," he said. "We have one arm tied behind our back because we are such a wealthy country."