ARTICLE | July 03, 2024

Canada, despite its wealth of resources and educated workforce, faces persistent challenges in productivity growth that threaten its economic competitiveness. Recent analyses from the Bank of Canada and RSM Canada shed light on these issues and propose strategies for improvement.

According to a report by RSM Canada, Canada's productivity growth has lagged behind that of other developed nations, primarily due to underinvestment in innovation, inadequate skills development, and complex regulatory environments. These factors have contributed to slower economic expansion and hindered the country's ability to fully capitalize on its potential.

Carolyn Rogers, Deputy Governor of the Bank of Canada, underscores the urgency of addressing Canada's productivity dilemma. In a recent speech, Rogers emphasized the need for targeted investments in technology and infrastructure to bolster productivity across industries. She highlighted that harnessing digitalization and fostering a supportive regulatory framework are crucial steps toward revitalizing Canada's economic growth engine.

The Bank of Canada further elaborates on these points in its publication, "Time to Break the Glass: Fixing Canada's Productivity Problem." The report advocates for structural reforms aimed at reducing barriers to innovation and enhancing workforce skills through continuous education and training initiatives. By fostering a conducive environment for business innovation and entrepreneurship, Canada can enhance productivity levels and ensure sustainable economic prosperity.

To effectively address these challenges, collaboration between government, businesses, and educational institutions is essential. Strategic investments in research and development, coupled with policies that promote agile regulatory practices, can create a fertile ground for innovation and economic diversification.

While Canada faces significant hurdles in boosting productivity, the insights from RSM Canada and the Bank of Canada provide a roadmap for progress. By embracing technological advancements, investing in human capital, and streamlining regulatory processes, Canada can unlock its productivity potential and pave the way for robust economic growth in the years ahead.

For further details on how Canada can turn around its lagging productivity, explore the full reports from RSM Canada, CBC, and the Bank of Canada.

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