Template-Type: ReDIF-Article 1.0
Author-Name: Tim Sargent
Author-Workplace-Name: Macdonald-Laurier Institute
Title: Productivity Growth in Canada: What is Going On?
Abstract: Canada is seriously lagging in productivity growth, which is the only means countries have to raise their citizens’ standard of living. Overall, Canadian business productivity fell by 0.6 per cent over the past five years. This is in sharp contrast to the United States, which enjoyed a 10.1 per cent increase over the same period. This trend of faster U.S. growth has held true since the mid-1990s,
with Canadian productivity rising by about half as much as the American rate. In fact, Canada trails not only the U.S. but all advanced countries in Northern and Western Europe, as well as Australia.
To increase productivity, governments should look at income tax rates, excessive red tape, regulatory harmonization, a lack of competition and barriers to foreign entry into the economy. Governments also need to look at improving their own productivity to avoid crowding out the private sector and to free up resources. There isn’t a one-size-fits-all solution. A broad range of policy options are necessary to solve Canada’s productivity problem.
Journal: The School of Public Policy SPP Briefing Papers
Volume: 17
Issue: 17
Year: 2024
Month: October
File-URL: https://www.policyschool.ca/wp-content/uploads/2024/10/FP-9-ProductivityGrowth-Final.pdf
File-Format: Application/pdf
Handle: RePEc:clh:briefi:v:17:y:2024:i:17