At a time when rising interest rates are the lead story in economic news, another issue is playing out here but doesn’t garner the same attention. In part, it’s because it is a complicated storyline and hard for most of us to get our heads around.
But the issue is productivity and that’s important because it is a symptom of something we do understand – Canada’s standard of living is declining.
Forty years ago, Canadians enjoyed a big advantage on this one. We averaged $4,000 USD more than our counterparts in other industrialized countries. But our failure to invest in research and development, along with shrinking capital investment levels, has taken a toll. By 2000, for example, the Americans had jumped to US $8,000 per capita ahead of us.
The measure economists use to track this is Real GDP or Gross Domestic Product and a new report from TD Bank shows that the only provinces that exceeded the national average on this one in both 2000 and 2022 were Alberta and Saskatchewan because of the investment capital our oil industry attracts.
