Bank of Canada governor Tiff Macklem is sounding the alarm on Canada’s productivity problem and urging policy-makers to dig into why the country struggles with low business investment.
But looking at the longer term economic picture, he warned productivity is the country’s weakness, noting that on average, businesses invest much less per worker in Canada than they do in the United States. The issue of is top-of-mind for many economists concerned that low business investment will depress living standards in the country.
“And with an aging population and limits to how many immigrants we can successfully absorb each year, improving our productivity growth will become more important to sustaining trend growth,” Macklem said.
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