Canada's Productivity Crisis Demands Urgent Action
Canada faces a significant productivity challenge that threatens the nation's economic future. Over the past decade, labor productivity growth has slowed dramatically to approximately 0.2 percent per year, a stark contrast to the 1.5 percent average growth experienced during the previous two decades. This persistent gap compounds over time, affecting everything from household affordability to national competitiveness.
The Far-Reaching Impact of Productivity Decline
Productivity sits at the core of nearly every economic challenge confronting Canada today. From trade competitiveness and public finance sustainability to the daily cost of living for Canadian families, productivity influences multiple dimensions of national well-being. The solution isn't about working longer hours or pushing workers harder—it's about finding innovative ways to accomplish more with existing resources.
Key areas for improvement include:
- Reducing interprovincial trade barriers to help businesses scale across regions
- Designing tax and regulatory systems that encourage rather than hinder investment
- Enhancing skills training to better match workers with employment opportunities
- Leveraging emerging technologies like artificial intelligence to streamline operations
- Developing infrastructure that moves goods, services, and people more efficiently
A Long-Term Research Solution Emerges
Recognizing that productivity involves complex, interconnected policies spanning taxation, trade, labor markets, innovation, infrastructure, and governance, the federal government has launched a substantial research initiative. Through a $6-million investment from the Social Sciences and Humanities Research Council, the University of Calgary's School of Public Policy will expand its Productivity Initiative into a comprehensive, long-term research network.
This initiative represents a shift from isolated studies to sustained collaboration, focusing on building human capital, data resources, and analytical tools that policymakers can actually implement. The program aims to generate evidence that directly informs real policy decisions over the next fifteen years.
Building a National Research Network
The expanded Productivity Initiative brings together an impressive coalition of academic and government partners. More than thirty researchers will collaborate with six federal government agencies and multiple universities across Canada. Current academic partners include prestigious institutions such as the University of Toronto's Rotman School of Management, Western University, McMaster University, HEC Montréal, and Memorial University of Newfoundland.
Additional researchers from the University of Alberta, McGill University, and the University of Waterloo will contribute to this national effort. The initiative evolved from a national productivity summit held in Calgary in 2024, followed by cross-country events in 2025 and 2026 that revealed consistent regional demand for practical, policy-ready research.
As Trevor Tombe of the University of Calgary, who leads the project, emphasizes: "The aim is not one-off studies, but sustained collaboration: building people, data and analytical tools that policy-makers can actually use" to address Canada's productivity challenges.
