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TORONTO — There is a concerning number of so-called zombie firms that are plaguing Canadian productivity, according to a new report from Deloitte.

About 16 per cent of Canadian public companies fall into the category of zombie firms established by the OECD — more than 10 years old but unable to earn enough to cover interest payments on debt.

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The Canadian firms, numbering at least 350 from Deloitte’s findings, divert resources away from more productive and dynamic enterprises and diminish opportunities for growth, said Duncan Sinclair, chair of Deloitte Canada and Chile.

“That’s tied up $130 billion in capital, and even more importantly tied up people, that might otherwise be deployed into organizations that have more momentum, more growth, more capacity to assert themselves as global leaders.”

The issue is especially concerning in Canada, where the number of such companies stands 60 per cent higher than the global average of 10 per cent, and shows Canadian firms are vulnerable to economic shocks and technological disruption.