Canadian productivity declines for third consecutive quarter - Harper government first in Canada to oversee negative productivity growth

    OTTAWA, Sept. 10 /CNW Telbec/ - The Harper government has become the
first elected federal administration to experience a decline in average
national productivity during its entire term in office since Statistics Canada
began gathering productivity data in 1961, says a study released today by the
Canadian Centre for Policy Alternatives (CCPA).
    The study, by CCPA research associate and Canadian Auto Workers economist
Jim Stanford, draws on this morning's Statistics Canada reporting that
Canada's national productivity level declined in the second quarter of 2008,
for the third consecutive quarter, by 0.2%. Since peaking last autumn,
national productivity has declined by a cumulative 1.3%.
    Most strikingly, national productivity is now lower than in the first
quarter of 2006, when the Stephen Harper government took office. At that
point, Statistics Canada's index of national labour productivity (measured in
the business sector of the economy) equaled 104.0 (calculated on a base of
2002=100). As of the second quarter of this year, the index had declined to
103.4, marking a cumulative decline of 0.6% over the Harper government's term
in office.
    "Finance Minister Jim Flaherty has repeated many times that Canada's
economic fundamentals are strong," Stanford says. "But there is nothing more
fundamental to our long-term prosperity than productivity. And on that score,
Canada's fundamentals have never been weaker than under the Harper
    Stanford blames three major structural factors for the absolute lack of
productivity growth during the Harper term in office:

    1. The energy and commodity boom, which has undermined productivity in
       resource industries by luring companies to exploit increasingly
       marginal deposits.
    2. The negative impact of the high Canadian dollar (which tends to follow
       oil prices) on high-productivity manufacturing jobs.
    3. The importance of low-productivity service sectors (such as retail and
       hospitality) in new job creation.  These are the only sectors
       relatively immune from the negative effects of the high dollar.

    "We've had three strikes against our national productivity, and they're
all related to the Harper government's acceptance of Canada's new status as an
energy 'superpower.' By endorsing the high dollar and abandoning Canadian
manufacturing, this government has done more damage to our national
productivity than any other government in our postwar history," Stanford

    Canada's Productivity Performance Under the Stephen Harper Government is
    available on the CCPA web site:

For further information:

For further information: Kerri-Anne Finn, CCPA Communications Officer,
(613) 563-1341 x306.

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Canadian Centre for Policy Alternatives

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