News > Blog

Is the U.S. losing its competitive edge to Canada?

Izzy Santa, Director, Strategic Communications, Consumer Technology Association
Canadian prime minister Justin Trudeau came to San Francisco last week to pitch U.S. tech companies on moving to Canada. As the San Francisco Chronicle reported, Trudeau touted his country’s diverse and highly educated workforce and its Global Skills Strategy visa.
Under the remarkable new visa program, Canadian companies can hire highly-skilled foreign talent within a mere two weeks. Because the U.S. has not kept pace and expanded the number of visas it affords high-skilled workers, American companies see Canada as an increasingly attractive option for relocation.
Although Canada makes it easier for businesses to recruit top talent, however, CTA’s inaugural International Innovation Scorecard shows that other factors make the U.S. friendlier toward innovation as a whole.
The Scorecard, which ranks 38 countries and the EU across several categories, honors both the U.S. and Canada as Innovation Champions – recipients of its highest ranking – but the U.S. has faster and more affordable broadband connections, higher R&D spending and entrepreneurial activity, and laws more favorable to drones, ridesharing and self-driving vehicles.

Here is how the U.S. and Canada compare across 10 categories on the Scorecard:
With more women and immigrants participating in its workforce, Canada bests the U.S.
With greater measures of both personal and political freedom, Canada outperforms the U.S.
Broadband speeds are comparable for both countries, but the cost for for one gigabyte of mobile data in Canada is $39.66, compared to only $16.50 in the United States, which earns the U.S. the prize.
Human Capital
Both the U.S. and Canada have more than 40 percent high-skilled employment, but Canada has a higher percentage of undergraduates earning STEM degrees, so Canada boasts the higher mark.
Tax Friendliness
At 26.5 percent, Canada’s corporate tax rate is on par with those of other countries on the Scorecard, and though the U.S. may soon rank higher in the category under its new tax law, as of the end of 2017, Canada took the prize.
R&D Investment
The U.S. spends over one percent more of its GDP on R&D than Canada does, landing it considerably closer to the top of the Scorecard, and earning it the honors.
Entrepreneurial Activity
The U.S. is home to far more unicorns (businesses valued at over $1 billion) than Canada, with 46 U.S. unicorns for every Canadian one. The U.S. also has an annual new business entry rate of 4.3 per 1,000 people – almost four times higher than that of Canada. Not surprisingly, the U.S. takes the cake.  
The FAA’s plan to pursue a drone pilot program will boost innovation and grow jobs, but the sluggish pace of rulemaking presents barriers. Even so, America’s drone registration process is much easier and fairer than Canada’s, earning the U.S. the prize.
Both the U.S. and Canada lack federal ridesharing rules, but in the U.S. most states allow ridesharing services to operate freely, while Canada has burdensome restrictions in major markets. This earns the U.S. a higher ranking.
Self-Driving Vehicles
The U.S. encourages testing and development of self-driving vehicles nationwide. Canada allows testing in Ontario only, so the U.S. wins.

Learn more about the 2018 CTA International Innovation Scorecard.