Canada has fallen behind most of its G7 peers, warns senior deputy governor<\/p>\n
Canada must tackle\u00a0weak productivity<\/a>\u00a0to inoculate the economy against factors that will drive future inflation, such as the pullback from globalization, said Carolyn Rogers, senior deputy governor of the\u00a0Bank of Canada<\/a>.<\/p>\n \u201cAn economy with low productivity can grow only so quickly before inflation sets in. But an economy with strong productivity can have faster growth, more jobs and higher wages with less\u00a0risk of inflation<\/a>,\u201d she said in a March 26 speech in Halifax, adding that other drivers of inflation will include changing demographics, the economic impact of\u00a0climate change<\/a>\u00a0and global tensions.<\/p>\n Canada\u2019s productivity has fallen from a \u201cnot great\u201d record of producing 88 per cent of the value generated by the United States economy per hour in 1984 to just 71 per cent in 2022, she said. And while weak investment has been a problem in Canada for the past 50 years, the gap between the level of capital spending per worker by Canadian firms and the level spent by their U.S. counterparts has become worse over the past decade or so.<\/p>\n \u201cWhile U.S. spending continues to increase, Canadian investment levels are lower than they were a decade ago,\u201d Rogers told her audience, adding that Canada has also fallen behind most of its G7 peers, with only Italy seeing a larger decline in productivity relative to the United States.<\/p>\n \u201cYou\u2019ve seen those signs that say: In emergency, break glass \u2014 Well, it\u2019s time to break the glass,\u201d she said.<\/p>\n Increasing competition is among the solutions that Rogers proposed. She also urged policymakers to focus on sectors and companies that add greater value to the economy and to set the stage for increased investment, including in technologies that will improve productivity and efficiency.<\/p>\n \u201cWhen a company increases productivity, that means more revenue, which allows the company to pay higher wages to its workers without having to raise prices,\u201d Rogers said. \u201cThe bottom line is that the benefits from raising productivity are there no matter what your role is: for workers, for businesses and, yes, for central bankers, too.\u201d<\/p>\n Rogers said policymakers should also focus on labour composition, or the skills workers bring to the job to improve Canada\u2019s productivity.<\/p>\n This includes training and \u201cre-skilling\u201c for existing workers and taking\u00a0advantage of immigration<\/a>.<\/p>\n \u201cToo often, new Canadians are working in jobs that don\u2019t take advantage of the skills they already possess. And too often these people wind up stuck in low-wage, low-productivity jobs,\u201d she said. \u201cDoing better at matching jobs and workers is crucial to the future of Canada\u2019s economy.\u201d<\/p>\n Rogers said her biggest concern, though, is competition, especially because certain sectors in Canada are not facing competition from firms in other provinces, foreign rivals or new entrants.<\/p>\n \u201cOf course, every country has certain sectors that it champions, and there can be valid reasons to protect local businesses,\u201d she said. \u201cHowever, too much protection can lead to problems. It can also help to explain Canada\u2019s weak record in business investment.\u201d<\/p>\n Read more at: financialpost.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Canada has fallen behind most of its G7 peers, warns senior deputy governor Canada must tackle\u00a0weak productivity\u00a0to inoculate the economy against factors that will drive future inflation, such as the pullback from globalization, said Carolyn Rogers, senior deputy governor of the\u00a0Bank of Canada. \u201cAn economy with low productivity can grow only so quickly before inflation … Continue reading Bank of Canada says the country faces a productivity ’emergency’<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":21342,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-24893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-content\/uploads\/2022\/09\/black_horse_blog-300x100-300x100-1.jpg","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p8fAkI-6tv","_links":{"self":[{"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/posts\/24893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/comments?post=24893"}],"version-history":[{"count":1,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/posts\/24893\/revisions"}],"predecessor-version":[{"id":24894,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/posts\/24893\/revisions\/24894"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/media\/21342"}],"wp:attachment":[{"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/media?parent=24893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/categories?post=24893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/setapartbytruth.org\/wordpress-watchman\/wp-json\/wp\/v2\/tags?post=24893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}