An interesting article last week by RBC' Nathan Janzen, the Assistant Chief Economist:
https://thoughtleadership.rbc.com/weak-productivity-is-threatening-canadas-post-pandemic-wage-growth/
explains that the productivity growth in Canada since the pandemic have been struggling to catch up to inflation and especially with productivity growth in the US. Some key facts (RBC):
1. "The level of output per hour worked in Canada at last count (Q3 2023) was below average levels four years earlier in 2019".
2. …"More than a decade of low business investment is likely part of the problem...".
3. …"6% surge in the United States".
The conversation about productivity needs to happen in Canada. If not, we will soon refer to it as a foreign concept. It is about staying competitive for investors and clients. We have to be careful not to fall to far away from other countries. Falling too far behind would create negative cascading effects.
This could work the other way too but Canada as a whole fails to revert the trend. The aggregate of Canadian enterprises cannot compete because they fail at doing more with less. If we did, investors would come back and clients too, as costs would fall.
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