OTTAWA, Nov. 16, 2011 /CNW/ - If Canada's productivity had matched that
of the U.S. between 1988 and 2008, individual Canadians would be much
wealthier, corporate profits would be much higher, and all levels of
governments would have raked in billions more dollars. This is the
conclusion of a Conference Board of Canada study that looks at how
much—in dollars and cents—Canada has lost as a result of two decades of
sluggish productivity growth.
Real GDP per capita would have been $8,500 higher in 2008, personal
disposable income would have been $7,500 higher, corporate profits
would have been 40 per cent higher, and federal government revenues
would have been 31 per cent higher, if Canada's labour productivity had
matched the United States between 1988 and 2008.
"Putting it plainly, increasing our productivity growth performance over
the past two decades to equal that of our neighbour would have
significantly increased Canadian wealth and improved our standard of
living," said Mario Lefebvre, Director, Centre for Municipal Studies.
"These results should impress upon policymakers, as well as average
Canadians, just how vital it is for Canada to improve its productivity
Based on 2008 figures, Americans were $13,000 richer than Canadians when
measured in purchasing power parity. Under a scenario in which Canada's
productivity growth matched that of the United States, the gap would
have been less than $7,000.
Labour productivity growth in Canada has been weak since the mid-1980s.
For this analysis, the Conference Board developed a simulation boosting
Canadian labour productivity growth by 0.8 percentage points per year
higher from 1988 to 2008. This increase is identical to the difference
between annual labour productivity growth in the United States (2.2 per
cent) and Canada (1.4 per cent) over those 20 years.
The Conference Board has argued that productivity growth is based on
three principal factors—labour quality, capital intensity and what
economists call multi-factor productivity, which, in the main, is
innovation. Multi-factor productivity includes technological progress
and organizational changes. Since the 1980s, Canada's performance in
both multi-factor productivity (or innovation) and capital intensity
has been sluggish relative to the U.S. performance, while labour
quality has been relatively stable. Previous Conference Board research
found that Canada's relatively well-educated workforce does not have
the physical capital required to maximize productivity performance.
This publication, Canada's Lagging Productivity: What If We Had Matched the U.S.
Performance?, was conducted as part of the CanCompete program of research and
dialogue, which is designed to help leading decision-makers advance
Canada on a path of national competitiveness.
SOURCE CONFERENCE BOARD OF CANADA
For further information:
Yvonne Squires, Media Relations, Tel.: 613- 526-3090 ext. 221