FIRST READING: If the economy had stayed where it was in 2015, we'd all be earning an extra $4200 – National Post

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If the economy had stayed where it was heading in 2015, Canadians would all be earning an extra $4,200 per year, according to an illuminating new report by Statistics Canada.

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This roughly means that if the Canadian economy had merely spent the last nine years sticking to its usual rate of growth, Canadians would have experienced a natural increase in their paycheques larger than any number of Trudeau government benefits, including the $500 one-time top-up to the Canada Housing Benefit offered in 2022, or the $650 per child currently offered to eligible families as part of the Canada Dental Benefit.

The Statistics Canada report — authored by researchers Carter McCormack and Weimin Wang — adds to a growing body of literature showing that Canadian productivity is dropping fast, resulting in noticeable decreases to income and living standards that are set to continue dropping for the foreseeable future.

Everyone from the Bank of Canada to the Canadian Chamber of Commerce to the OECD have now issued increasingly dire warnings about Canada’s “productivity problem.”

Earlier this year, the Bank of Canada’s senior deputy governor Carolyn Rogers warned that lagging productivity was now a national emergency. “You’ve seen those signs that say, ‘In emergency, break glass.’ Well, it’s time to break the glass,” she said at a March speech in Halifax.

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In 2021, the OECD calculated that if Canada keeps this up, it will rank as the worst performing economy in the developed world for at least the next three decades.

Historically, Canada’s high rate of capital investments has been most important towards increasing its per-worker productivity. As an example, a Canadian worker with a $100,000 bulldozer is going to produce much more for the economy than a Canadian worker with a shovel.

But McCormack and Wang highlight 2016 as the year when Canadian businesses dramatically cut back on how much capital they were investing in each worker.

This phenomenon just happens to coincide with the opening months of Trudeau’s premiership, but the researchers chalk it up to a 2014 collapse in energy prices.

“Investment per worker sharply declined following a collapse in energy prices in 2014 and 2015 and has not recovered,” they write in a note, adding that dropping productivity won’t reverse itself without “sustained increases in capital spending.”

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And while GDP per capita was already on the decline, the report also cites the “shock of the COVID-19 pandemic” at pushing it into overdrive.

In a 2022 analysis on the COVID-19 lockdown, Wang concluded that while Canadian GDP was pretty quickly able to return to pre-pandemic levels, GDP per capita was never the same.

Which isn’t to say that federal policy hasn’t contributed to Canada’s ever-shrinking productivity rates.

For one, the researchers point to “near-record population increases.” With more than a million newcomers now coming to Canada each year as a result of loosened federal immigration policy, population growth is now well outstripping GDP growth — with the result that the country’s already lacklustre economy is increasingly being shared out among more and more people.

“The pace of population growth warrants particular emphasis in the current context,” wrote McCormack and Wang.

Perhaps most damning for Canada is that the U.S. — a country that has similarly been hammered by COVID and low 2014 energy prices — has not experienced anything close to the falling productivity seen by Canadians.

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The new Statistics Canada report found that Canadian GDP per capita is roughly seven per cent lower than where it would be if the Canadian economy had stayed the course on where it was headed in 2015.

The Americans, by contrast, mostly have stayed the course of where they were headed in 2015. An analysis last June by University of Calgary economist Trevor Tombe determined that if Canadian productivity growth had merely kept pace with the U.S. for the last five years, the result would have been a $5,500 per person boost to average incomes.

IN OTHER NEWS

Menstrual products have become mandatory in yet another category of Canadian washroom. The Ontario government of Premier Doug Ford has just made it mandatory for construction sites employing “twenty or more workers” to provide “both tampons and menstrual pads” in onsite washrooms. Unlike Trudeau government mandates for free menstrual products on military bases and in federally regulated workplaces, the only difference with the Ford order is that it didn’t explicitly require tampons to be put in men’s facilities. Although that will generally be the effect, as construction sites typically employ single-stall port-a-potties that are not segregated by gender.

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After it became a week-long scandal that the Trudeau government had deleted images of Vimy Ridge from the official Canadian passport (in favour of stylized images of trees and squirrels), the Bank of Canada has issued a statement solely to assure Canadians that while they are currently redesigning the $20 bill to incorporate a portrait of King Charles III, “the back will continue to feature the Canadian National Vimy Memorial.” It’s also going to continue to be green, but will be vertically oriented like some current iterations of the $10 bill.

Also, fun fact: There are $20 billion worth of $20 bills in circulation. Transforming a few cents of polymer and ink into $20 slips of currency is usually why the Bank of Canada can be relied upon as one of the few federal departments to reliably turn a profit. But as with a lot of things these days, that’s no longer the case, and they continue to hemorrhage billions.

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