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Bank of Canada senior deputy governor Paul JenkinsJOHN TANGUAY

The Bank of Canada continued its campaign Monday urging Canadian business to prepare itself for an increasingly competitive global economy.

Senior deputy governor Paul Jenkins told a business audience in Toronto that Canadian business must adapt to an environment in which emerging economies will be growing at two or three times the rate of the developed world.

In the next decade, emerging economies will account for 55 per cent of the world's economic output, compared with only 45 per cent at present.

That means the market for Canadian products will increasingly be in emerging economies, Mr. Jenkins said.

Those economies present gold-plated opportunities not only for the Canadian resource sector but also for firms that can create products that appeal to the growing consumer class in countries like China, he said.

The problem is that productivity in Canada has been lagging in the past decade.

Last week, Bank of Canada governor Mark Carney put the blame squarely on the shoulders of Canadian business people, saying they have failed to invest in productivity-enhancing technologies despite plentiful government incentives, including a competitive tax system.

Mr. Jenkins gave another reason for why the Canadian corporate sector is now well-placed to take advantage of the new global economy.

Compared with many other countries, he said Canadian businesses are emerging from the recession with relatively healthy balance sheets and with borrowing costs at historic lows.

And he said financial institutions have an opportunity to make more credit available to small- and medium-sized firms that want to step up investment.

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