It's hard to quantify the economic cost of an investment chill.
Statistics Canada doesn't track investments that aren't made – the delayed plant openings, the shelved purchases of new equipment or the quiet shifting of production out of the country.
That doesn't make the uncertainty hanging over the Canadian economy any less real. The cloud over the North American free-trade agreement, ongoing U.S. protectionist threats and the sudden loss of Canada's corporate tax advantage are all weighing heavily on business decision-makers. Already-high labour and electricity costs in Canada compound these obstacles.
Dennis Darby of Canadian Manufacturers and Exporters says many of his members are "sitting on their hands" when it comes to making major investment decisions.
"We have a 10-year-old Chevy and we're driving the doors off of it. We're not buying new tires or changing the spark plugs," he said in an interview.
With NAFTA rules in play, auto makers and parts suppliers, in particular, are reluctant to commit to big capital decisions only to "find out a year down the road that things have changed," Magna International Inc. chief executive Don Walker told Bloomberg News last week.
Business investment in Canada has bounced back from a severe slump in 2015 and 2016. But that largely reflects the recovery from the investment crater in the capital-intensive oil patch.
And the trend obscures all the investment that isn't happening in other sectors.
It's virtually impossible to draw a direct line between a specific threat and any one corporate decision. But the anecdotal evidence is disquieting.
A rare bit of investment good news is General Motors's opening in January of a major new technology and software-development centre in Markham, Ont., that will eventually employ 1,000 people.
The bigger picture is that Canada has not been winning its traditional share of new auto investment for at least the past decade. No auto maker has built a new assembly plant in Canada since Toyota opened its Woodstock, Ont., plant in 2008. And at the time, the Woodstock plant was the first in the previous 20 years.
The bulk of new investment is now flowing to the United States. For example, Toyota and Mazda are building a joint assembly plant in Huntsville, Ala., and Fiat Chrysler Automobiles NV recently announced plans to shift production of a pickup truck to Detroit from Mexico.
The same phenomenon is apparent in food processing, where there has been a steady disappearance of older neglected plants. Campbell Soup Co. of Camden, N.J., is closing its Toronto-area soup factory and shifting production to the United States. Likewise, Germany's Dr. Oetker is abandoning its frozen-pizza facility in Grand Falls, N.B., and moving operations to other Canadian and U.S. facilities. The closures follow the path of recent Canadian factory shutdowns by HJ Heinz, Kellogg, Unilever and Smucker's.
Bank of Canada Governor Stephen Poloz warned recently that companies are investing less in Canada for fear of being caught on the wrong side of the border by adverse trade rules. "That's already happening today. [Investment is] being delayed or redirected to the U.S.," he told reporters.
New "greenfield" foreign direct investment in Canada by U.S. and European companies has been in decline since mid-2016 – a "possible sign" that trade uncertainty is taking a toll, the central bank said in its latest Monetary Policy Report.
The resulting investment chill will knock 0.5 percentage-points off economic growth in Canada over the next couple of years, according to Bank of Canada estimates. And new lower U.S. federal corporate tax rates will magnify the problem, the bank said.
A massive tax-reform package passed by the U.S. Congress in December has turned what was a roughly eight percentage-point Canadian advantage in the marginal effective tax rate on new investment into a two percentage-point handicap, according to calculations by the University of Calgary's School of Public Policy.
So what should Canada do? There are no easy answers, and so far Ottawa is doing many things right. It's staying at the NAFTA table, making constructive proposals to improve the deal, and hoping for the best. The government has begun to address longer-term competitiveness challenges laid out by Finance Minister Bill Morneau's Advisory Council on Economic Growth.
If it dares to go there, the government could also cut business tax rates in its Feb. 27 budget – a path being advocated by many business groups.
The worst thing this country could do is pretend there isn't a problem.