Cracking the Productivity Code

Courtesy Conference Board of Canada

Key findings

• Canada has a productivity problem. Labour productivity growth
  is lagging that of many developed economies. Understanding and
  addressing the factors driving this poor performance is critical if
  Canada is to maintain its long-term prosperity.
• Increased educational attainment and skills have contributed steadily
  to Canada’s productivity growth, but capital intensity and efficiency
  have had setbacks and have contributed unevenly across industries.
• Weakening business investment reduced productivity growth by
  0.5 percentage per year over the past decade. If that slowdown had
  not occurred, nominal GDP would be roughly $130 billion (4.2 per cent)
  higher today.
• To enhance productivity growth, Canada must focus on unlocking
  private sector investment. A review of the competitiveness of the
  country’s regulatory and corporate tax regime with other jurisdictions
  should be a starting point.
• A lack of competition is also detrimental to business investment.
  Eliminating internal trade barriers, a long-standing problem, could
  provide a solid boost to Canada’s prosperity.
• The good news is Canada’s businesses are becoming more
  knowledge-intensive, and adopting technologies such as AI may
  provide the next productivity boost our country so desperately needs.