In the race to improve productivity and household incomes, winners and losers emerge among the Canadian provinces, according to a report from the C.D. Howe Institute.
In "Lagging Behind: Productivity and the Good Fortune of Canadian Provinces," author Serge Coulombe says growing labour productivity is the most important determinant of future economic welfare and, by that measure, Canada is falling behind its major trading partners.
Increasing labour productivity does not mean employees working harder for less money. Rather, says Coulombe, it means more investment in human capital (education and training), physical capital (plants or other infrastructure) and technology.
The slowest productivity growth was in B.C., followed by New Brunswick. The report noted that B.C.’s lag in productivity growth is due mainly to anemic physical capital accumulation.
Overall, Coulombe points out, labour productivity growth for Canadian provinces is very low from an international perspective, behind the average of the United States and the Euro 15 area.
Jennifer Harrison
Twitter: jharrisonbiv