Canada's Broadband Performance

I often get frustrated by slow internet download speeds and wonder how download speeds in Canada compare with other parts of the world. Here is a chart comparing Canada's broadband performance with some other countries. Download speeds in Canada are a little below those in the US, but the real surprise is that download speeds in Canada and the US have not changed much over the past 4 years. South Korea, Lithuania. Latvia, and Switzerland are some of the countries that enjoy download speeds at least double what we have here in Canada. I view slow download speeds as a barrier to increased productivity. As more content switches to an online format, it is important to have high speed access to this content.

Are Companies Hoarding Cash?

Bank of Canada Governor Mark Carney created a stir on August 22 when he said that too many Canadian companies are hoarding cash rather than putting it to productive uses to help create economic growth.

Bank National has responded with their own report on the cash holdings of 327 publicly traded Canadian  companies that the bank follows (see here). Their research finds that these companies are holding about $55 billion in cash. A lot of money, but no where near the $500 billion or so that has been quoted by skeptics.

South of the boarder, we have a much clearer picture on how much cash US companies are hoarding. Thanks to publicly available Federal Reserve data we know that US companies are sitting on a little over $2 trillion in cash (see here). The interesting thing is that, in an historical context, this is not that much. Cash as a percentage of total assets actually bottomed in 1981.

R&D Spending in Canada

In relation to my previous post on global competitiveness, and how important R&D spending is for global competitiveness, here is a chart showing R&D spending as a percentage of  GDP for some OECD countries.


According to the OECD (see here):
"Expenditure on research and development (R&D) is a key indicator of government and private sector efforts to obtain competitive advantage in science and technology."

As the chart shows, Canada spends less than the OECD average on R&D. Canadian spending on R&D peaked in 2001, just before Nortel Networks imploded. Since then, however, the trend has been down. In 2010, R&D expenditure as a % of GDP was 1.8% for Canada and 3.8% for Finland. The private and public sectors in Canada need to spend more on basic R&D. With the recent troubles that RIM is having I fear that private sector spending on R&D in Canada is about to take a further hit.

Canada Slips in Global Competitivness

The World Economic Forum has released their latest global competitiveness ranking. As was the case last year, Switzerland  tops the list followed by Singapore. Switzerland's top ranking is due to strong innovation performance, labour market efficiency, and a well functioning business sector. Switzerland has some of the best research institutions in the world and their is strong collaboration between the research centers and business. Switzerland has the second highest rate of patenting per capita.

Canada is ranked 14, two spots lower than last year. Canada  has slipped 5 places since 2009.Canada scores high in health and primary eduction but investment in education, research and development and entrepreneurship are weak. Since these factors are key drivers to the wealth creation process, Canadian governments and businesses would do well to invest more heavily in education, R&D, and entrepreneurship.

European countries do fairly well in this ranking which is a bit surprising given all of the debt problems in the Euro zone. Among the BRICs, China ranks 29, Brazil 48, India 59, and Russia 67.

The LIBOR Scandal

Here is a really good post on what is up with LIBOR. What it is, why it is so important, and how easy it is to manipulate.

Canada's Medal Count at the 2012 Olympic Games

This story ran a few months back in the National Post but it is worth a re-post as the games draw near. I find it exciting to see that a fairly simple model can predict the Olympic medal count so accurately. I assume that the prediction formula is based on a regression model and if I was teaching a forecasting course I would want to try to estimate this. Congratulations to Professor Dan Johnson for working this out! His predictions show that for the 2012 games, the US is still the country to beat but China and Russia will both do very well. Perhaps a bit disappointing is that Canada is predicted to win a total of just 17 medals, one fewer than it won in 2008. Notice that Australia and Hungary, two countries with smaller populations than Canada are predicted to win more medals than Canada.

Latest Corporate Transparency Ratings

Transparency International has recently analysed corporate transparency in the 105 largest companies in the world (here). Combined together, these companies are worth $11 trillion dollars. Canada's current GDP is approximately $1.8 trillion dollars so these companies have a combined wealth of approximately 6 times the size of the Canadian economy.

"Companies are scored from 0-10 based on their disclosure of various sorts of business information important for investors and the general public: where they pay their taxes, their corporate structures and what they are doing to prevent corruption. In the scores, 10 is most transparent, and 0 is least transparent."

Basically, the survey measures three things.

1. A company's internal rules and procedures to prevent corruption.

2. The amount of transparency in a company's organizational structure.

3. The amount of information a company publishes regarding its business activities in other countries (especially with respect to paying taxes and  royalties to government).



The top companies are:

The bottom companies are:

Two Canadian companies are on the list (both banks) and they rank in the middle of the pack. In terms of rankings within the financials industry, TD is ranked 5 th in the world and Royal Bank ranks 11 th.

It is interesting to see some big mining companies at the top of the list and some big US and Japanese companies at the bottom of the list. Ranking individual companies on transparency is interesting, but the rankings might be more dependent on the industry in which a company operates. In other words, the rankings may be more important for companies operating in highly visible industries like mining or energy. After all, does it really matter where Amazon, Berkshire Hathaway or Google rank? From a research perspective, I find that Transparency International's ranking of countries to be more informative.