Financing Growth in Canada

David Robinson, an economics professor, is dean of the Faculty of Social
Sciences at Laurentian University.

Do Canadian capital markets work well? Is the cost of capital in Canada
too high? Is there anything the government can do? If these questions
matter to you, this tome may be worth your time. Its 760 pages contain
15 Industry Canada Research conference papers, including an excellent
summary of the conference by Donald Brean and a clear summary of the
policy implications by Jack Mintz, both of the University of Toronto
Faculty of Management.

The conference did not produce a policy agenda. The issues are complex
and in many cases research has not yielded unequivocal answers. It
appears that capital is more costly in Canada than in the United States.
It seems that the tax system distorts interprovincial investment more
than international investment. Beyond these and a few other results, the
detailed discussion of the effects of asymmetric information,
institutional forms, and specific markets, such as the venture capital
market or labor-sponsored funds, make the volume valuable.

Financing Growth in Canada is organized by sections and each section
includes valuable comments—virtual research papers in their own right.
The editing and production are very good. The volume is unlikely to gain
wide circulation, but it will have a continuing effect on financial
market research in Canada. Industry Canada is to be congratulated for
the quality of the policy research it supports.