Opinion: Private equity is part of the solution to Canada’s productivity crisis
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Private equity builds businesses for the wider benefit, acquires underperforming companies, and presents growth opportunities through efficient capital deployment and better alignment of management's interests. Private equity has been a key driver of the unrelenting growth of the U.S. economy. The U.S. Department of Justice and Federal Trade Commission have recently questioned private equity's incentives and announced a cross-government public inquiry into private equity and other private investment in the U.S. health care industry. Canada's Commissioner of Competition has expressed concerns about private equity roll-up strategies and their potential harm to competition. Canada's productivity has fallen behind the United States and its Group of Seven peers, with weak business investment, meagre competition, and a risk-averse business culture being cited as reasons. Private equity can combat these issues by providing liquidity, efficient allocation of capital and resources, instilling industry best practices, and creating positive disruption. Private equity has a longer history of positive contribution to economic growth, productivity, and prosperity.