TORONTO, June 16, 2011 /CNW/ - In the race to improve productivity and
household incomes, winners and losers emerge among the Canadian
provinces, according to a report from the C.D. Howe Institute. In Lagging Behind: Productivity and the Good Fortune of Canadian Provinces author Serge Coulombe says growing labour productivity is the most
important determinant of future economic welfare and, on that measure,
Canada is falling behind its major trading partners.
Increasing labour productivity does not mean workers working harder for
less money, a common canard. Rather, says Coulombe, it means more
investment in human capital (education or other learning); in physical
capital (plants or other infrastructure); or in technology. Professor
Coulombe shows which Canadian provinces, in the last 25 years, have
advanced the furthest in labour productivity growth, and why.
Highlights of the provincial track records include:
The fastest productivity growth during the period was in Newfoundland
and Labrador, followed by Saskatchewan and Ontario. The slowest
productivity growth was in British Columbia, followed by New Brunswick.
Newfoundland and Labrador saw the largest improvement in its
productivity because the province moved away from a low-productivity
natural resource business, fishing, to a higher-productivity natural
resource activity, oil extraction, and it recorded the largest
improvement in human capital.
British Columbia clearly lags behind the other provinces in productivity
growth, mainly because of anemic physical capital accumulation.
Alberta has had among the lowest growth rates for human capital and
labour productivity, reflecting a growing reliance on extracting
resources from the oil sands, which require more labour and capital per
dollar of output than did past oil and gas reserves.
Overall, Coulombe points out, labour productivity growth for Canadian
provinces over the period is very low from an international
perspective; behind the average of the United States and the Euro 15
For the study go to http://www.cdhowe.org/pdf/Commentary_331.pdf
SOURCE C.D. Howe Institute
For further information:
Serge Coulombe, Department of Economics, University of Ottawa;
Benjamin Dachis, Policy Analyst, C.D. Howe Institute,
416-865-1904; e-mail: email@example.com.