Labour Productivity In Canada

Productivity is a measure of how efficiently goods and services are produced. Labour Productivity Growth is an economic indicator of a country's prosperity. Over the long-term productivity is the single most important determinant of a country's per capita income. Countries with high productivity are those that are innovative and able to adapt to the constant fluctuations of global economy. Such countries have a higher standard of living. Higher productivity growth produces higher national output which can be used for increased personal consumption, public or private investments or additional public sector investments. On the flip side, countries with lower levels of productivity have to achieve faster growth to catch-up and must expend more efforts to maintaining it for extended periods of time.

Canada's labour productivity growth has been comparatively slower compared to the US. Between 1980 and 2011, labour productivity in Canada grew by only 1.4% while American labour productivity grew by

To increase long-term labour productivity growth the federal government must work with other levels of government, businesses and various groups to implement policy measure that enhance innovation systems. Some policy measures are improving regulatory frameworks to expand trade, making strategic infrastructure and technological investments and supporting labour market efficiency.

Streamlining and improving regulatory frameworks to support trade liberalization and expansion allows exporting Canadian firms to exploit economies of scale thus making them more productive. Opening local industries to competitive pressures from international firms will push them to focus on producing higher-value products. Forcing Canadian companies to learn and adapt to global competitiveness and adopt best-practices promotes innovation which in turn boosts