Canada's long-debated productivity problem may stem from internal factors, but it's also an issue that can be addressed. For years, the country has pondered why wages are stagnant, company scaling is slow, and growth is a struggle. A new study commissioned by the Competition Bureau of Canada points to regulatory barriers as a key impediment, restricting companies' ability to compete, enter markets, set prices, hire, and expand across provinces.
The study suggests that easing these barriers could boost Canada's economy by 6.5% to 10% long term. This is due to current regulations across energy, transportation, retail distribution, and professional services being more restrictive than necessary. When compared to 14 other OECD countries over 25 years, Canada, once competition-friendly, has fallen behind.
These findings highlight the need for Canadian businesses to improve productivity and innovation to unlock the nation's economic potential. This can be achieved through increased investment in R&D, technology adoption, and cultivating a high-performing workforce. As Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, stated, "It's time to break the glass".
The study's estimates translate to a potential $7,500 increase in living standards per person over time. By aligning its regulations with international best practices or even just closer to U. S. levels, Canada can see substantial gains. The federal government is also investing $6 million over 15 years to support a research partnership led by the University of Calgary, aimed at developing policies to boost productivity. This collaborative effort between researchers and policymakers aims to create actionable solutions for long-term economic challenges.
