Canada's Largest Companies Lacking in Innovation

A recent analysis argues that Canada's largest companies are too mature to drive economic growth. The commentary, written by Kevin Carmichael for The Logic, compares research and development spending across Shopify, Suncor, and Canadian Natural Resources Limited (CNRL), the country's three largest companies.

The analysis draws on the work of Peter Howitt, a Canadian economist who was awarded the Nobel Prize last year. According to Howitt, healthy economies generate steady growth from new ideas, technologies, and market entrants, rather than from one-off boosts such as commodity price swings or low interest rates.

Carmichael's analysis notes that Shopify spent approximately $445 million on research and development in the second quarter, which is about 12% of its revenue. In contrast, Suncor's R&D spending was grouped among 'non-production costs,' making up only 1% of its operating revenue.

The commentary also cites an essay by Robert Asselin, CEO of U15, who argues for an 'offensive industrial policy' that would direct government spending toward growth-oriented firms. Asselin suggests that this approach would help Canada's economy innovate and compete globally.