The productivity problem – Bank of Canada [Video]

Senior Deputy Governor Carolyn Rogers talks about some of the reasons for Canada’s poor productivity track record, and what we can do to turn the tide.

A healthy economy depends on high productivity

Strong productivity—which leads to faster growth, more jobs and higher wages—is an important way to protect the economy from the risks of high inflation.

Canada has seen no productivity growth in recent years. And over the past four decades, we have actually slipped significantly compared with some other countries. In fact, relative to the United States, among G7 countries we are now second only to Italy when it comes to productivity decline.

This is important because a number of factors threaten to drive inflation persistently higher in the future. These include global trade tensions, changing demographics and the economic impacts of climate change. We need to ramp up our productivity now, as a buffer against these and other forces down the line.