Canadian Investment in ICT Appears Much Lower Than in US

The Information Technology Association of Canada (ITAC) has released a report that appears to show that while Canada ranks better than half way up the league tables of OECD countries in investment in the information and communications technologies (ICT) sector, vis-à-vis the United States, its principal trading partner, Canada is investing much less, both in terms of ICT dollars invested per worker and of ICT invested as a share of GDP. The 120-page report, entitled "What Explains the Canada-US ICT Investment Intensity Gap?" (Report) was prepared by the Centre for the Study of Living Standards. In some industry sectors, such as arts, entertainment and recreation, Canada is actually spending more on ICT than is the US. However, this sector is an exception to the general trend. Two possible explanations for the gap are offered. One is that lower labour costs in Canada do not compel capital substitution at the same rate as in the US. Secondly, many sectors in Canada are dominated by foreign-owned companies in which much capital spending for ICT may be accounted for overseas. For an executive summary of the Report, visit: http://www.itac.ca/Events/2005/05Dec12ExecutiveSummary.pdf For the full Report, visit the ITAC web site and follow the links: http://www.itac.ca For the most recent aggregate Canadian statistics on the ICT sector, see 2004 Canadian ICT Statistical Overview by Statistics Canada and the related Canadian ICT Sector Profile at: http://strategis.ic.gc.ca/epic/internet/inict-tic.nsf/en/h_it07229e.html Summary by: The Editor