Commodity boom blinds Canada to problems: report

Mon Jun 30, 2008 7:50am EDT
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By Louise Egan

OTTAWA (Reuters) - Canadians shouldn't be fooled by high commodity prices into thinking their economy is on the right track because, in fact, it is slipping badly in comparison with other rich countries, a report said on Monday.

The Conference Board of Canada's 12th annual report comparing Canada's performance with 16 peer countries painted an unsettling picture of a nation that has become a laggard when it comes to innovation and productivity.

The economy could be doomed to a hard landing when the commodity boom expires unless the right public policies are put in place, it suggested.

"While Canada is still in the gifted class among nations, its report card tells the story of a country moving to the back of the class," the board's report said.

"That's a hard argument to make in a country enjoying low unemployment, a strong dollar, declining debt and a booming resource economy. If everything's so bad, why does it feel so good?" it said.

Canada ranked in the bottom half in five of the six categories analyzed: economy, innovation, environment, education and skills, health and society.

The report rips into what it calls "myths" about Canada having one of the best standards of living in the world and being a leader in science and technology.

"The BlackBerry is the exception, not the rule," it said, referring to the popular smartphone created by Waterloo, Ontario-based Research In Motion and sold around the world.   Continued...