Canada is becoming a laggard productivity-wise when compared to the US.
The nation’s lacklustre performance across metrics over the past decade comes despite Canada’s “abundant natural resources, highly skilled workforce, strong institutions, and research capabilities,” laments a new report from BDO Canada.
The recently released report, titled “Canada’s productivity paradox,” shows that it currently takes a Canadian worker 1.4 times more effort than their U.S. counterpart to add the same value to the economy. The difference wasn’t always so large.
“Canada’s productivity paradox demands urgent attention, particularly as we navigate an increasingly complex and uncertain geopolitical landscape,” says Jeff Chapman, a Managing Partner at BDO Canada.
In 2021, Canada’s investment in information and communication technology as a percent of GDP was just 25%, compared to 37% in the US. More investment into tech and talent could close this gap.
“Canada’s productivity paradox underscores the urgent need for businesses to embrace a technology-driven future, from AI to cloud computing,” posits Rishan Lye, Consulting Leader at BDO Canada. “To remain competitive, leaders must champion the adoption of these technologies and ensure their seamless integration across all levels of the organization.”
It’s not just about tech—but also talent. On that front, upskilling will prove key to sufficiently preparing workforces as organizations utilize evolving toolkits.
“This requires an investment in employee training and development, empowering them with the skills to leverage these technologies and unlock innovation for sustainable growth,” said Lye.
As mentioned, Canadians are well-educated, with the share of post-secondary graduates being the highest in the OECD. But because of the previously referenced economic gap, a significant portion of skilled graduates leave Canada for better opportunities.
“There is a talent shortage across all sectors, but especially in technology,” says Harry Chana of BDO. “Many Canadian grads are moving outside Canada, which means we don’t fully reap the benefits of our educational investments.”
The report from BDO considers other talent factors as well, such as an aging population and a mismatch in education between the degrees being earned and the skills actually needed in the field.
Chapman says the report aims “to highlight the complex factors hindering our overall productivity and provide actionable recommendations for businesses to navigate these challenges.”
It thus supplies suggested solutions, including implementing more of a skills-based education system to better serve the demand pipeline, and encouraging a more risk-tolerant culture of entrepreneurship nationwide.
“By adapting, innovating, and embracing a growth mindset, Canadian businesses can improve productivity and remain competitive on a global scale,” Chapman stated.
Read the full report here.
