Hot Topics Overview

The 2008–09 financial crisis and resulting global recession caused massive turbulence in the major Organisation for Economic Co-operation and Development (OECD) economies, making it hard to draw meaningful conclusions from the preliminary data from that period. While we wait for actual post-recession data to be released later this year so we can update the six performance category report cards, we are releasing a series of 10 “hot topic” analyses.

Is the world becoming more unequal?

At the global level, income inequality rose sharply around the world between the 1980s and the mid-1990s, before levelling off and then falling after 2000. Even with the recent decline, 42 per cent of total world income today goes to those who make up the richest 10 per cent of the world’s population, while just 1 per cent goes to those who make up the poorest 10 per cent. Countries with very high inequality are clustered in South America and southern Africa. Countries with low inequality are mostly in Europe. Canada and the U.S. have medium income inequality. And unlike most other countries, income inequality has continued to rise in Canada and the U.S. since the mid-1990s, with Canada outpacing the United States.
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Is Canada becoming more unequal?

Income inequality in Canada has increased over the past 20 years. The richest group of Canadians increased their share of total national income, while poor and middle-income individuals lost ground. The gap between the real average income of the richest group of Canadians and the poorest group grew from $92,300 in 1976 to $117,500 in 2009. Another worrisome trend is the rise in elderly poverty since the mid-1990s, following 20 years of dramatic reductions. Between 2006 and 2009, nearly 128,000 more seniors were living in low income. Of that amount, 70 per cent were women.
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What can Canada learn from other countries to improve its Environment report card?

Canada’s environmental performance has improved in some areas and deteriorated in others. Some progress has been achieved in the areas of air quality, natural resources management, and energy efficiency. But Canada must do more to lower greenhouse gas emissions (GHG), to use its freshwater resources more wisely, and to reduce waste—all in an economically feasible way. There are numerous examples of innovative strategies other countries are using to improve their environmental performance.
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How much do advanced skills affect innovation performance?

Countries have long recognized that the education and skills of the labour force are the underpinnings of innovation. Innovation is only possible if there are people who can perform research that generates new ways of thinking and new knowledge, who can apply their knowledge and skills, who can adopt new technologies and processes, and who can adapt to change. Yet there is little hard evidence on the explicit links between specific skills and innovation performance. We looked at the link between advanced skills and innovation.
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Do lifestyle choices affect health outcomes?

On the surface, health outcomes appear to be improving for Canada and its peer countries. Death rates for many chronic diseases have fallen, thanks to improved health technologies and better health care. However, the fact that mortality rates due to cancer and chronic diseases are falling does not mean that the incidence of chronic diseases is on the decline. North Americans and Europeans continue to be plagued by a number of chronic diseases that are often linked to lifestyle choices. Smoking, over-consumption of alcohol, poor diet, and inactivity all greatly increase the risk of developing heart disease, hypertension, diabetes, and cancer.
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Do countries get what they pay for when it comes to health care?

Canada and its peer countries continue to spend more on health care, and this spending will rise with the aging of their populations. But, more spending does not necessarily translate into better health outcomes. The U.S. has the highest health spending per capita among its peers, yet it fares poorly on life expectancy, infant mortality, and premature mortality.
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Why is M&E investment important to labour productivity?

Investment in machinery and equipment (M&E)—particularly information and communications technology—is widely recognized as essential to improving labour productivity. Yet, Canada’s investment in M&E as share of GDP is among the lowest of its peer countries. Historical data for Canada and its peers reveal a strong positive relationship between investment in M&E and labour productivity.
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Is Canada attracting its “fair” share of inward FDI?

Canada’s share of global inward foreign direct investment (FDI) has dropped significantly over the past few decades—yet Canada is still attracting slightly more than its “fair” share of FDI. Inward FDI helps expand trade. In this new era of integrative trade, global supply chains are driven by FDI. Inward FDI can also boost productivity by providing access to new technology, business and manufacturing processes, and management know-how, as well as by fostering a competitive and innovative business environment.
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