{"id":81113,"date":"2024-09-24T21:19:00","date_gmt":"2024-09-24T21:19:00","guid":{"rendered":"https:\/\/resourcework2.devstudio.work\/?p=81113"},"modified":"2024-11-13T17:01:09","modified_gmt":"2024-11-13T17:01:09","slug":"canada-productivity-slump","status":"publish","type":"post","link":"https:\/\/resourcework2.devstudio.work\/?p=81113","title":{"rendered":"Canada\u2019s productivity and prosperity slump"},"content":{"rendered":"

National productivity is key to our personal prosperity and standard of living\u2014and we\u2019re in trouble.<\/p>\n

Canada\u2019s productivity, a measure of our efficiency in producing goods and services, has been seriously slumping for years, and we are now one of the least productive G7 nations.<\/p>\n

Now, business leaders say part of the solution could, and should, lie in producing natural resources and supercharging the resource sector.<\/p>\n

The Royal Bank of Canada\u00a0reports<\/a>: \u201cThe Canadian economy has continued to underperform global peers. Declines in per-capita output in seven of the last eight quarters have left average income per person back at decade-ago levels, and the unemployment rate has risen more than in other advanced economies.<\/p>\n

\u201cCanada is not \u2018officially\u2019 in a recession… but per-capita gross domestic product and the unemployment rate are more representative of what individual households and workers are experiencing in the current economy, and on that basis, it certainly feels like one.\u201d<\/p>\n

Now,\u00a0a new report<\/a>\u00a0by the Canadian Chamber of Commerce says a comprehensive national strategy is needed to promote resource investments.<\/p>\n

\u201cWe really need to lean into our strengths as a country,\u201d says report author Andrew DiCapua. \u201cWe are lucky to live in a country where we have abundant natural resources… We should be trying to find ways to attract investment to supercharge the sector.\u201d<\/p>\n

Senior economist DiCapua notes: \u201cWith Canada facing significant economic challenges\u2014below-trend growth, declining living standards, regulatory uncertainty, and weak business investment\u2014the Canadian economy is not keeping pace.<\/p>\n

\u201cThe main recommendation here is to create regulations and policies that provide regulatory certainty\u2014or rather clarity\u2014so that investment can be attracted into this crucial (natural-resource) sector.\u201d<\/p>\n

The national business group says the new approach should include streamlining government regulations, recognizing the need for timely approval of major projects, and ensuring policy stability.<\/p>\n

It also recommends speeding up the delivery of investment tax credits for projects that cut emissions and adopting a trade infrastructure plan to ensure the country has sufficient roads, ports, and energy transmission lines for accessing resources in remote areas.<\/p>\n

The Chamber notes that the natural-resources sector is the second-largest in Canada, paying compensation last year that was $25,000 more than the national average.<\/p>\n

\u201cThe sector can do this because of its productivity prowess, which is closely linked to the country\u2019s prosperity and long-term standard of living. This is why increasing investment in high-productivity sectors, particularly within natural resources, is an obvious remedy to our productivity challenges.\u201d<\/p>\n

And it adds: \u201cGiven the natural resources sector\u2019s higher-than-average Indigenous workforce participation, higher wage opportunities can help increase Indigenous employment and economic participation, furthering economic reconciliation efforts by supporting Indigenous-owned businesses, equity partnerships, and employment.\u201d<\/p>\n

Economists, business leaders, and the Bank of Canada have highlighted the country\u2019s productivity woes for years\u2014and the level of concern is growing.<\/p>\n

As TD Economics pointed out in a\u00a0worrisome report<\/a>: \u201cCanadians\u2019 standard of living, as measured by real GDP per person, was lower in 2023 than in 2014.<\/p>\n

\u201cWithout improved productivity growth, workers will face stagnating wages, and government revenues will not keep pace with spending commitments, requiring higher taxes or reduced public services.\u201d<\/p>\n

And: \u201cOver the decade prior to the pandemic, business sector productivity grew at a respectable rate of 1.2% annually. Since 2019, it has ceased to expand at all, setting Canada apart as one of the worst-performing advanced economies, not to mention in stark contrast to the United States…<\/p>\n

\u201cThe woes are widespread. Relative to growth in the decade prior to the pandemic, only a few service industries have managed to improve their performance… To get the same output, it now requires more hours from workers. Hard to believe this could occur in a digital age.\u201d<\/p>\n

Economist\u00a0Trevor Tombe<\/a>\u00a0of the University of Calgary states: \u201cThe gap between the Canadian and American economies has now reached its widest point in nearly a century.<\/p>\n

\u201cIf this continues, we\u2019ll not have persistently seen this wide of a gap since the days of John A. Macdonald… Taking bolder action to address this growing prosperity gap is needed. And fast.<\/p>\n

\u201cThe U.S. is on track to produce nearly 50 percent more per person than Canada will. This stunning divergence is unprecedented in modern history.\u201d<\/p>\n

Earlier this year, Carolyn Rogers, senior deputy governor of the Bank of Canada, gave this warning on our productivity: \u201cYou\u2019ve seen those signs that say, \u2018In emergency, break glass.\u2019 Well, it\u2019s time to break the glass.\u201d<\/p>\n

Rogers said in\u00a0a Halifax speech<\/a>: \u201cAn economy with low productivity can grow only so quickly before inflation sets in. But an economy with strong productivity can have faster growth, more jobs, and higher wages with less risk of inflation…<\/p>\n

\u201cWe thought productivity would improve coming out of the pandemic as firms found their footing and workers trained back up. We\u2019ve seen that happen in the US economy, but it hasn\u2019t happened here. In fact, the level of productivity in Canada\u2019s business sector is more or less unchanged from where it was seven years ago.\u201d<\/p>\n

It\u2019s beyond time for our federal and provincial governments to get in gear and take steps to help get our productivity back on track.<\/p>\n

The Chamber of Commerce\u2019s recommendations would be a good place to start: adopt sensible regulations and stable policies that encourage investment in our natural resources, and speed up the approval of major projects.<\/p>\n","protected":false},"excerpt":{"rendered":"

\u201cIt\u2019s time to break the glass.\u201d And our natural resources could be a prime solution.<\/p>\n","protected":false},"author":3,"featured_media":83420,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[3,4],"tags":[33,18,47,46],"class_list":["post-81113","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forestry","category-mining","tag-canada","tag-economy","tag-natural-resources","tag-productivity"],"acf":[],"yoast_head":"\nCanada\u2019s productivity and prosperity slump -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/resourcework2.devstudio.work\/canada-productivity-slump\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" 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