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It didn’t used to be this way. Canada performed better than the U.S. for corporate investment from 2001 to 2012. This was obviously due to the commodity-price boom, but was helped by business tax reductions under federal and provincial governments of all political stripes.

Today, investors view Canada as an unappetizing country

But after 2012, Canada began increasing regulatory and tax burdens on investment. The tax burden on capital since then has risen by roughly 13 per cent. The most heavily taxed sector in Canada is services (excluding those for oil and gas), as research I’ve done with my colleague Phil Bazel has shown. That includes industries in transportation and communication, which is a terrible way to begin the supposed economy of the future, since those are going to be its critical foundations.

Today, investors view Canada as an unappetizing country, with the federal Liberals’ demonstrated commitment to ongoing corporate and personal tax hikes and our hamstrung regulatory processes in everything from building permits to pipelines. Losing NAFTA would kick another leg out from Canada’s weakening competitive appeal. No wonder so many businesses are extremely cautious about making big investments.

Photo by Mike Hensen/The London Free Press/Postmedia

Investment matters. If you eat the entire corn crop and save no kernels for planting, you won’t have corn to eat next year. The innovation that the Liberal government keeps saying it wants depends on businesses making investments for the future.

If the government thinks innovation will happen because it announced funding for five “supercluster” projects across Canada, it’s missing perspective. In Trump-like bravado, the government claims that $50 billion in GDP will be created in a decade — $5 billion a year — but that’s based on projections using a patently unrealistic growth multiplier. Here’s the reality: five supercluster projects investing $2.4 billion — $950 million paid by taxpayers — is a drop in the bucket of a $2-trillion economy.