So here’s a ray of sunshine: We’ve been named the second-best country in the world in which to do business.
The 2014 edition of Bloomberg’s annual ranking places Canada above the U.S., with our southern neighbour coming in third.
Canada has been rocketing up the charts in recent years, placing 12th in 2012, then sixth last year, before overtaking the U.S. in 2014.
Click to see the top countries (story continues below):
Bloomberg’s list isn’t a ranking of economic strength; it measures the ease with which companies can do business, which is not the same thing (and which is why economically struggling Spain can rank ninth on the list).
Much of Canada’s improvement in the rankings has to do with its falling tax rate. Successive Liberal and Conservative governments have slashed the corporate tax rate, from 28 per cent in 2000 to 15 per cent in 2012.
"The tax cuts helped make investments more profitable,” Bloomberg says.
But some economists say the tax burden’s shift away from corporations may not be good for consumers. For the first time in history, individual income-tax payers will shoulder more than half of the country’s total tax burden this year.
But the Bloomberg survey also credits Canadian consumers for the country’s positive business environment: Simply put, Canadians earn a lot, spend a lot and are willing to pay those higher-than-the-U.S. prices.
“Canada jumped from sixth place to second largely because of the receptivity of its consumers, measured by the size of its middle class, household consumption and GDP per capita,” Bloomberg says.
The sliding Canadian dollar also helped. “A weakening dollar ... will help the world’s 11th-largest economy rebound from weaker-than-expected exports,” Bloomberg reports, citing economists’ forecasts.
Not all rankings place Canada this high among best countries to do business. Forbes’ latest ranking, which came out last month, ranked Canada ninth, and that’s down from fifth place the year before — and first place the year before that.
Canada ranked particularly poorly in the Forbes ranking on innovation and technology, market performance and monetary freedom.