#productivity #canada
Her speech in Halifax on March 26 made it clear that the problem is official and a core challenge. Here are some of the statements she made during her speech:
1. "Productivity is a way to inoculate the economy against inflation. An 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."
2. "...Given how nimble companies were, we thought productivity would improve coming out of the pandemic as firms found their footing and workers trained back up. We’ve seen that happen in the US economy, but it hasn’t happened here. In fact, the level of productivity in Canada’s business sector is more or less unchanged from where it was seven years ago."
Our observation: the COVID crisis aid packages to companies and people laid off had no productivity-related incentives. In fact, part of the business loans did not have to be paid back. The incentives to be more productive were simply not there.
3. "Labour productivity measures how much an economy produces per hour of work. Increasing productivity means finding ways for people to create more value during the time they’re at work."
Our observation: Canadians work only 19 hours less yearly than Americans. Canadians take and/or are also entitled to fewer weeks of vacation than many of the more productive nations (such as France and Norway). The question is about creating (more) value.
The rest of her speech can be found at: https://www.bankofcanada.ca/2024/03/time-to-break-the-glass-fixing-canadas-productivity-problem/
Comments