Canada’s Productivity Blueprint
How can we turn years of weak growth into stronger investment, higher productivity, and better living standards for Canadians?
The C.D. Howe Institute Productivity Blueprint: At a Glance
Canada has a productivity problem. Productivity, the amount we produce for each hour worked, is the main source of rising incomes and living standards over time. Canada’s GDP per capita tracked that of the United States from 1994 to 2014, but has fallen behind both the US and other advanced economies since. Tariff threats and a more unpredictable world have made tackling this problem more urgent than ever.
The Productivity Blueprint is the C.D. Howe Institute’s answer. It brings decades of Institute research together into one agenda governments can act on. It:
- Shows how Canada performs against its peers on living standards, productivity, and business investment, and why productivity matters so much.
- Explains that there is no single fix, since productivity ultimately comes from three sources – capital deepening, human capital, and the efficiency with which both are used – each shaped by a different set of policy levers.
- Organizes government action into eight pillars built around those levers: tax, regulation, competition, human capital, innovation, business growth, trade, transportation, and supply chains, and fiscal policy and government productivity.
- Draws exclusively on C.D. Howe Institute research from the past decade or more across those eight areas to deliver more than 100 actionable recommendations for government.
The Productivity Blueprint will be updated as new work is published, giving policymakers a clear plan to tackle the barriers that keep Canada from reaching its massive potential.
The Eight Pillars
Tax Reform and Competitiveness
Tax policy, which can encourage work and production instead of consumption, and encourage, or discourage, company growth and innovation.
Regulation
Regulation, which when well-designed can raise standards of living and firm performance, but when badly designed can put unnecessary obstacles in the way of the adoption of new technologies and techniques, discourage risk-taking, or result in fragmented markets.
Competition
Competition policy, which can help the economy find a critical balance between encouraging the benefits of scale and the point at which too few competitors discourage innovation.
Human Capital
Human capital policies which can help build and better match Canadians’ skills and competencies with available technologies and emerging growth opportunities.
Innovation, Technology, and Commercialization
Innovation and commercialization policies that encourage R&D subsidies and support for research partnerships, early adoption of innovation through government procurement processes, better IP management, marketing support, and trade diplomacy.
Business Growth: From Formation to Scale
Policies designed to help businesses grow from formation to scale and sustainability, through better access to capital, business advice, or support for technology adoption.
Trade, Transportation, and Supply Chains
Improving Canada’s trade and transportation infrastructure, and removing obstacles to supply chain efficiency to ensure Canadian businesses have the best opportunities to grow.
Fiscal Policy and Government Productivity
Fiscal discipline that improves value-for-money in the design and delivery of government programs, and boosts government productivity more generally. Rapid public sector expansion financed by deficit spending, when it does not deliver commensurate improvements in service quality or efficiency, reduces growth opportunities by leaving behind debt which crowds out private investment and signals higher future taxes.