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FIRST READING: Canadian economic productivity is in freefall
Per-capita economic production – and relative living standards – are dropping with no end in sight
Tristin Hopper
Published Jun 20, 2023 • Last updated 17 hours ago • 4 minute read
TOP STORY
Although Canadian economic growth is just barely keeping its head above water, data keep emerging to show that, for the average Canadian, the economic situation is getting progressively worse.
New data from Statistics Canada show that Canadian labour productivity has dropped for the fourth consecutive quarter. Compared to this time last year, the average Canadian is now producing two per cent less during every hour they spend at work.
And it’s not like our per-capita productivity was all that good to begin with. An analysis by University of Calgary economist Trevor Tombe found that Canada’s per-person rate of economic output is now on the level of some of the poorest states in the U.S.
Ontario’s rate of per-capita productivity, for instance, is now about the same as Alabama. And even Alberta – Canada’s most unambiguously wealthy province – wouldn’t come close to cracking the top 10 among richest per-capita U.S. states.
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Tombe noted that recent drops in productivity have effectively erased five years of gains, sending Canada right back to the productivity levels of 2017. If Canada had instead spent those last five years matching the productivity growth of the United States, Tombe estimates that it would have meant an extra $5,500 in increased economic output per Canadian.
“Given how closely wages are tied to productivity, this directly affects our living standards and, in my view, poses a bigger affordability challenge than recent high inflation,” he wrote.
Source: National Post
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