There’s No Silver Bullet for Canada’s Productivity Problem

C.D. Howe Institute Releases a Series of Recommendations to Boost Canada’s Productivity

October 15, 2026 – Canada needs coordinated reforms across multiple policy areas to address its longstanding productivity problem, according to the C.D. Howe Institute’s Productivity Blueprint, released today with recommendations for policymakers across different sectors and levels of government.

Canadians’ living standards have fallen behind those of other advanced economies. From 2014 to 2024, real GDP per capita, a common measure of living standards, grew just 3.5 percent in Canada, the slowest among nine peer countries and far behind the United States, where it grew 20.2 percent.

Drawing on decades of non-partisan, peer-reviewed research, the Productivity Blueprint identifies eight policy areas that, together, can drive stronger investment, higher productivity, and better living standards for Canadians: tax reform and competitiveness; regulation; competition; human capital; innovation and commercialization; business growth; trade, transportation and supply chains; and fiscal policy and government productivity. The Blueprint offers specific recommendations in each area.

On tax policy, for example, the Blueprint proposes cutting personal income tax brackets from five to three, replacing most credits and deductions with a $10,000 allowance, and lowering the general corporate tax rate to 10 percent. Past Institute work suggests these changes would unlock $140 billion in new business investment and add 2.5 percent to GDP.

But tax reform alone won’t close the gap. Weak competition in key sectors, low business spending on research and development, skilled newcomers working below their qualifications, and strained public budgets also hold productivity back.

Governments must address all eight policy areas together to make meaningful progress.

“The federal government has made some positive moves to address productivity growth, like the proposed Productivity Mega Deduction, the Major Projects Office, and Bill C-39. But there’s no quick fix for productivity,” says C.D. Howe Institute President and CEO Jeremy Kronick. “Real progress will take reform across many areas of policy at once, and the Blueprint provides a ready-made set of recommendations to achieve that goal.”

“If Canadians want stronger wages and living standards over the long term, raising productivity needs to be Canada’s number one priority,” says Kronick.

The full Blueprint is available today at cdhowe.org.

Read More 

For more information contact: Lauren Malyk, Manager, Communications, C.D. Howe Institute, 416-873-6168, lmalyk@cdhowe.org. 

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.