Canada’s economic growth will slow in the years ahead as a result of the country’s aging population. One critical way to offset the impact of aging demographics is through faster productivity growth, supported by enhanced innovation. But Canada’s track record on productivity is dismal.
Productivity (at its simplest, output measured in dollars per hour worked) is about working smarter, not working harder. Canadian productivity growth has lagged the United States and many other major industrial countries for nearly three decades. As a result, there is a significant income gap between Canadians and Americans – estimated at $7,000 per capita, and rising.
Slow productivity growth limits our ability to fund health and social programs, particularly as our aging population increases demand for services, such as health care.