A new report argues that Canadians are paying a huge price for not being as productive as their U.S. counterparts.
The Conference Board says per capita output would be $8,500 a year higher, and disposable income $7,500 more, if Canada had matched U.S. productivity gains between 1988 and 2008.
The Ottawa-based economic think tank says it hopes the study will drive home the point of the importance of improving Canada’s lagging productivity.
As well, corporate profits could be 40% higher and government revenues 31% more.
During the 20 year period studied, Canada’s productivity increased by an average 1.4% a year, compared to 2.2% in the U.S.
As a result, Americans were able to grow $13,000 richer every year than Canadians in terms of purchasing power.
The think-tank says that if Canada had kept up in its productivity, the gap would have been less than $7,000.
The Conference Board says its previous research suggests that while Canada’s labour quality has been relatively stable, capital investment by firms in productivity-enhancing machinery and equipment have lagged the U.S.