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Canada, a G7 economy, has suffered in recent years from low
productivity growth, lackluster foreign direct investment and
difficulty in bringing oil, one of its major exports, to market
due to a lack of pipeline capacity.
The Liberal government, which faces a general election in
October, has committed to major infrastructure investment and
has allowed businesses to write off additional capital
investments to make them more competitive, but has opted not to
match aggressive tax cuts by the United States.
"Our competitiveness is challenged. Our capacity to grow and
advance our economy is stalling," said RBC Chief Executive Dave
McKay, in prepared remarks for shareholders at the company's
150th annual meeting, in Halifax, Nova Scotia.
"When I travel overseas, I often hear concerns from investors
about Canada's falling position in the world," McKay said.
RBC has a market capitalization of about C$149 billion ($111.70
billion), according to Refinitiv Eikon data.
Data last month for the fourth quarter showed that Canada's
economy barely grew due to plunging Canadian crude oil export
prices and that the labor productivity of Canadian businesses
fell by 0.4 percent.
Steps that Canada can take to improve its competitiveness
include building digital and physical infrastructure, such as
energy pipelines, McKay said.
Due to a lack of pipeline capacity, the price of Canadian heavy
crude fell last October to a discount of more than $50 a barrel
below the benchmark for U.S. oil.
A Canadian court last August overturned approval of the Trans
Mountain oil pipeline expansion. The government has since bought
the pipeline in an effort to save the project.
(Reporting by Fergal Smith; Editing by Sandra Maler)
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