Canada Growth Summit 2024: Fixing productivity once and for all

2024-04-11 07:30:00 2024-04-11 14:00:00 America/Los_Angeles Canada Growth Summit 2024: Fixing productivity once and for all Metro Toronto Convention Centre, North Building,255 Front St West, Toronto, ON

Thursday April 11, 2024
7:30 a.m. - 2:00 p.m.

Metro Toronto Convention Centre, North Building
255 Front St West, Toronto, ON

About the Event

2024 Highlights:

“Productivity isn’t everything, but in the long run, it’s almost everything.” – Paul Krugman

Canada’s productivity has fallen for the past 13 quarters, sinking all the way back to 2016 levels. As a result, Canada finds itself mired in a deepening growth, competitiveness and living standards hole. Productivity, it turns out, is not left or right or pro-business or anti-workers. It is a universal good. That’s especially so in a tight labour market. Labour and capital are not rivals; they tend to be mutually supporting in a modern economy. As Globe economics writer Andrew Coyne says: “the problem is not that we have too much labour, but too little capital – machinery and equipment – for labour to work with.”

That’s because investment, the lifeblood of future growth, has also been trending down in recent years, including key categories such as machinery and equipment and intellectual property. In fact, the average Canadian worker now has less capital to work with than in 2014, according to the C.D. Howe Institute, It has calculated that the Canadian economy invested just $14,800 of new capital per worker in in 2022 about half the level for American workers and a little under three-quarters of OECD countries other than the United States.

There’s no single formula for reversing current productivity trends in Canada. Such classics as education and skills training, infrastructure development and getting things built in a timely manner have important roles to play. Certainly, creating conditions to encourage investment is critical. We need as a country to understand and address why we are falling behind on new machinery and equipment, intellectual property and the general adoption of leading-edge technologies.

The Public Policy Forum is concerned with the direction Canadian productivity is taking. We devoted our annual Canada Growth Summit on April 11, 2024, to understanding the problem and coming up with solutions that will enable Canadians to benefit from the universal economic good of productivity improvement. Canada’s post-war economic plan, put forward in a 1945 White Paper on Employment and Income by Industry Minister C.D. Howe, put forward a highly successful policy framework that essentially amounted to a high productivity, high wages social contract. Canada once again needs a plan to migrate away from current lower-wage, lower-productivity trendlines. What will that take?

Productivity is not some esoteric obsession of the world’s economists. Low productivity – essentially the amount of GDP generated for each hour worked – hits Canadians directly in their pocketbooks in the form of weak wage growth. PPF Fellow and former British Columbia cabinet secretary Don Wright has calculated that in the three decades after the Second World War, the pace of real average weekly wage growth (2.5% a year) meant an average worker’s pay doubled in just 27.6 years. For those entering the workforce in their late teens or early 20s, this doubling – after accounting for inflation – would have occurred before they turned 50. For obvious reasons, they had confidence they could pay off their mortgages and that their kids really would be better off.  But from 1976 to today – a five-decade slice of history featuring nine prime ministers and 15 finance ministers – real average wages have grown at the miserly rate of less than one quarter of a percentage point a year. Now it takes 290 years – an Old Testament lifespan – to double your income. No wonder Canadians are increasingly pessimistic about prospects for their kids or that young adults feel economically anxious and excluded. The affordability crisis and the productivity crisis are overlapping phenomena. “Simply put, lower productivity almost always means lower living standards,” University of Calgary economist Trevor Tombe says.

Canada’s poor showing stands out. Globe and Mail columnist Tony Keller has shown that Canadians work more hours while producing fewer goods and services than compatriots in comparable nations. Canada’s productivity now stands at 79% of the United States and so GDP per capita, unsurprisingly, is just 77%. It so happens that Finland’s GDP per capita is also 77% of the U.S., but its productivity is 91% — 12 percentage points higher than in Canada. How have the Finns benefitted from that extra productivity? By working fewer hours for the same standard of living. “Or to put it another way,” Keller says, “to keep Canada’s economy level with Finland, the average Canadian is working 200 more hours. We’re working harder. They’re working smarter.”


Our Networking Lounge in Room 205 hosted Immersive Experiences, Networking and Refreshments.

JP Gladu
Michael Serapio
Murad Al-Katib
Ramtin Attar
Chris Barry
Ana Bailão
Adam Chambers
Ehren Cory
Penny Favel
Hon. Sean Fraser, MP
Chief Sharleen Gale
Ray Gilmour
John Hannaford
Simon Kennedy
Laura Lee Langley
Victoria Lee
Jaimie Lickers
Deanna Matthews
Dan O'Brien
Sue Paish
Shannon Salter
Mikal Skuterud
Scott Stirrett
Kaylie Tiessen
Trevor Tombe
Carolyn Wilkins
Rupa Banerjee
Katie Feenan
Brett House
Zi-Ann Lum
Shingai Manjengwa
Hon. Lisa Raitt
Sean Speer
Luiza Savage
Heather Scoffield
Sara-Christine Gemson
Kathleen Gnocato
Edward Greenspon

For any questions, please contact Chantal Paquette (cpaquette@ppforum.ca)