BDO Canada unveils a path to productivity for Canadian businesses in new report: Canada's productivity paradox

TORONTO, Feb. 25, 2025 /CNW/ - BDO Canada is proud to release its latest report, Canada's productivity paradox. Developed through the collaborative insights of leading professionals from across the firm, the report delves into the factors contributing to Canada's lagging productivity despite its abundant natural resources, a highly skilled workforce, strong institutions, and research capabilities. The report also lays out a path for businesses to enhance efficiency, drive innovation, and compete globally—a priority amid recent tariff disputes and protectionist trade policies. 

"Canada's productivity paradox demands urgent attention, particularly as we navigate an increasingly complex and uncertain geopolitical landscape. With this report, we aim to highlight the complex factors hindering our overall productivity and provide actionable recommendations for businesses to navigate these challenges," said Jeff Chapman, Managing Partner, Advisory Services for BDO Canada. "By adapting, innovating, and embracing a growth mindset, Canadian businesses can improve productivity and remain competitive on a global scale. BDO is dedicated to supporting this journey, offering a range of services from digital transformation and operational optimization to enhancing access to capital."

Canada's productivity gap is evident in several key areas:

• It takes a Canadian worker 1.4 times more effort than their U.S. counterpart to add the same value to the economy
• In 2021, Canada's investment in information and communication technology (as a per cent of GDP) was 25%, compared to 37% in the U.S.
• In 2022, Canada's business innovation rate stood at 36%, trailing behind the U.S. at 50%, and the OECD average of 45%
• With a fear of failure rate of 55%, Canadians exhibit a higher level of risk aversion compared to their U.S. counterparts (45%) and the average across 16 developed countries (44%), which can hinder innovation

Key recommendations for Canadian businesses to improve productivity:

• Increase research and development (R&D) investments to enhance human capital, product differentiation, competitiveness, productivity, and economic resilience
• Embrace new technology and ensure effective adoption to improve efficiency and productivity
• Leverage partnerships with private equity, pension funds, government entities, and public companies to accelerate growth
• Foster a culture of innovation and encourage experimentation and risk-taking to drive innovation within organizations
• Maximize government incentives and programs available to support growth and drive innovation
• Manage risks to allow for adoption of new technologies while maintaining strong internal controls and compliance

"Canada's productivity paradox underscores the urgent need for businesses to embrace a technology-driven future, from AI to cloud computing," said Rishan Lye, Consulting Leader at BDO Canada. "To remain competitive, leaders must champion the adoption of these technologies and ensure their seamless integration across all levels of the organization. This requires an investment in employee training and development, empowering them with the skills to leverage these technologies and unlock innovation for sustainable growth."

Download the full report to learn how Canadian businesses can improve productivity and drive growth. 

About BDO

BDO Canada LLP is a leading provider of professional services to clients across a variety of sectors and segments. For over 100 years, our team has served communities across Canada through an integrated service offering including accounting, assurance, tax, and consulting services. This is complemented by deep industry knowledge and positions BDO to advise clients with both domestic and global needs.

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO member Firms.

SOURCE BDO Canada

Media Contact: Juliet Camus, Senior Consultant, Proof Strategies Inc., [email protected], [phone]