Introduction
Good morning.
In March last year, I gave a speech about the urgent need to improve Canada's productivity. I said that instead of thinking of productivity as some obscure economic statistic, we need to think of it as a reflection of our collective ability to improve living standards, drive growth and remain resilient in a rapidly changing world. I also stressed that improving productivity in Canada is a shared responsibility-one that spans the public and private sectors.
The speech seemed to add a little fuel to a debate that has been going on for some time-a debate about how Canada can best shake off its long-standing productivity slump. That debate took on even more urgency less than a year later, as a new administration in the United States implemented a series of trade policies that represent a massive shock to the Canadian economy.
Meanwhile, Canadians are still grappling with a higher cost of living. Inflation has been back within the Bank of Canada's target band of 1%–3% for a year and a half now, but life is more expensive than it was. This is frustrating for everyone, and it's particularly stressful for those in lower-income brackets and for young Canadians who are trying to get a start in life.
Higher productivity won't make Canada immune to US trade policy, but it would help buffer the effects of tariffs. And it's the clearest path to boosting real wages, making life more affordable. For businesses, higher productivity offsets rising input costs, so it helps maintain margins and preserve price competitiveness. And a more productive economy is more attractive to investors and trading partners.