Fading Productivity - Making Sense of Canada's Productivity Challenge

The Global Competitiveness Report of the World Economic Forum demonstrates that Canada’s competitiveness is at its lowest in the last five years. This paper seeks to understand the major causes of the decreasing competitiveness and how these factors have interacted with productivity growth. The analysis shows that institutional inefficiency as well as excessive government regulations imposed on businesses are damaging to productivity and competitiveness. Weak investments in capital goods hinder the ability to grow and to create greater economies of scale. Sufficient government investment is crucial to the maintenance of competitive post-secondary institutions, whereas employer-supported training is an important factor in improving labour productivity and business sophistication.