As part of our federal election coverage, Investment Executive explores the positions of the major federal political parties on the top issues affecting the financial services industry.

Here we look at where the parties stand on increasing Canada’s productivity:

All three main federal political parties appear to be genuinely concerned about Canada’s weak productivity growth — and they are all pledging to do something about it.

The Conservatives and Liberals say cutting corporate taxes, increasing research and development and improving skills should increase productivity. The NDP agrees on the last three items, but doesn’t believe corporate tax cuts would do any good.

Canada’s productivity level was third highest globally in 1960, but by 2004, it had fallen to 17th place. Our business-sector productivity growth trailed that of the U.S., our largest trading partner, by 0.4% in the 1980s, 0.3% in the 1990s and a colossal 2.9% in 2000-04, according to a TD Economics study.

The reasons for this are many. Canada has less machinery and equipment per worker, less R&D, fewer university-educated workers, higher taxes, a different mix of industries and less economies of scale. There can’t be much done about the last two because resources are a huge part of our economy and it’s an area where productivity gains are hard to come by. This is so because companies naturally start by extracting the cheapest and most accessible oil, gas and metals and then move on to harder-to-get products. And even though we have a much smaller domestic market, we could level the playing field in other areas.

The Conservatives aim to do this by enacting the corporate tax cuts the Liberals re-introduced in last November’s fiscal update. The Tories would also cut the small business tax rate to 11% over five years and raise the threshold to qualify to $400,000 from $300,000.

The NDP doesn’t believe corporate tax cuts will increase productivity because corporations are under no obligation to use the money they would save in productivity-enhancing expenditures. However, the NDP would support incentives to increase capital investment, develop environmental technologies and promote workforce training.

On infrastructure, the Conservatives would continue Liberal programs, including the Pacific Gateway initiative, as well as extend the gas-tax transfer program to cities with less than 500,000 in population. The Tories would also commit $2 billion for a new infrastructure agreement with the provinces.

As for the Liberals, they would provide an additional $1 billion for post-secondary infrastructure, which includes money for teaching hospitals. And the NDP wants to see a new national public infrastructure-financing agency.

On R&D, the Conservatives would invest an additional $500 million over the next five years to support university-based research through national granting councils, which would also include the indirect costs of research. They will also look at expanding the Scientific Research and Experimental Development Tax Incentive Program to all fields of research and various industry sectors. The Tories would also invest more in fisheries science and research.

The Liberals also have some new initiatives including the creation of 3,500 R&D internships with private research companies, MBA financial assistance for those with engineering and natural and health science graduate degrees, $160 million for large-scale integrated facilities that would bring together university and private sector researchers as well as supporting innovation in the auto and aerospace/defence sectors.

The NDP supports more funding for university-based research but wants the research kept in the public sector.

On skills, each party supports lowering the debt load of students and using immigration to ensure we have the skills needed. The Liberals and NDP are also putting an emphasis on early childhood education.

The Conservatives would introduce an apprenticeship incentive grant and a tools-tax deduction for individuals as well as an apprenticeship job creation tax credit for companies.

And the Liberals would work with the provinces, territories, unions and employers to remove disincentives for those who want to keep working after 65.