Canada’s Productivity Problems Are Deeply Rooted

Commentary Canada’s relatively weak productivity is one of the most discussed but least resolved economic problems confronting Canadians. The problem is often attributed to inadequate investment, insufficient competition, internal trade barriers, and many other possibilities. The problem is real: Canadian productivity is the second lowest in the G7, expressed in terms of GDP per hour worked. Canada’s productivity is about 75 percent of the United States level. The most important single cause of the problem is likely one that is rarely linked to it. It is Canada’s massive system of regional subsidies. In 2021, the Fraser Institute described how remarkably large these subsidies are, mainly from taxpayers in Alberta and Ontario....