Canada

If restoring price stability cannot ease the cost-of-living pressures weighing so heavily on the national psyche, what can? There is but one escape route: course-correcting the country’s miserable record on productivity, and artificial intelligence can help get us there [relax Lemmy, this is the only mention of AI in the piece].

“Deep down, Canada’s affordability problem is really a productivity problem,” Bank of Canada deputy governor Nicolas Vincent said in speech in November. “To make things more affordable, we need to raise our income. And the way to grow our income is by increasing productivity.”

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This wouldn’t be such a huge issue had productivity growth merely kept pace with the G7 average. In that case, the Canadian economy would be about 9 per cent larger than it is today, Mr. Vincent pointed out. That translates to an additional $7,000 per person, or $18,000 per household.

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Sadly, Canada has been doing very little of either for many years now. Canadian businesses are investing 20 per cent less in machinery and equipment per worker than they did 10 years ago, according to OECD data.

They are also trailing badly on research and development. At around 1 per cent of gross domestic product, Canada’s private sector investment in R&D is about half the OECD average.

Hardly surprising then that Canadian productivity growth has been trending downward for years, decades even.

https://www.theglobeandmail.com/investing/markets/inside-the-market/article-there-is-only-one-escape-from-the-affordability-crisis/