In this research, we explore what’s holding back Canada’s productivity growth—and therefore the country’s prosperity—and suggest ways to give it a boost.How could Canada unlock more private sector investment without costly publicly funded incentives? In which sectors of the economy is weak productivity growth the most concerning? Could taking advantage of technologies such as artificial intelligence be the answer to help bolster productivity?
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.
Chosen excerpts by Job Market Monitor. Read the whole story @ Cracking the Productivity Code: Charting a New Path to Prosperity – The Conference Board of Canada
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