Canada needs to do more to address lagging productivity, Ottawa conference told

Improving Canada’s labour productivity will take a concerted effort from government, the private sector and educational institutions, attendees of a recent conference in Ottawa heard. Speakers from the public and private sectors as well as Canadian economy analysts noted that there are many things that need to be done to decrease the ever-widening productivity gap between Canada and the United States. The CAN>WIN 05 conference, held on December 6 and sponsored by Microsoft Canada and the Conference Board of Canada, brought together some of the country’s foremost thinkers to talk about ways to improve the country’s productivity. Many noted that the time was right for such a conversation given the conference was held only a few short days after a federal election was called. David Hemler, former president of Microsoft Canada, noted during his presentation that no one would question the importance of innovation in driving greater economic productivity, but lately it’s even more significant. "We’re seeing a much greater sense of urgency with respect to the productivity question," he said. "This isn’t the time for stop-gap measures, we really need to think in the long term." Hemler added that if the country doesn’t begin to address issues surrounding productivity, "we’re not going to be able to really address issues around healthcare and education, for example." But where does Canada find itself compared to other nations? Anne Golden, president and CEO of the Conference Board, noted that Canada has been performing quite well in the past four years, but "our assessment for this year will be on the sober side." She noted that there are several reasons behind Canada’s lagging productivity, but singled out three in particular: companies themselves, trade and investment, and innovation. At the corporate level, Golden said Canadian companies invest less in training than American companies, capital intensity is lower and Canadian companies "don’t like risk." With respect to global trade and foreign investment, she said there is a lack of integrated supply chains and not enough foreign investment. On the innovation front, Golden highlighted the Conference Board’s rankings where Canada has slipped from fourth spot to sixth in the past year. Innovation is the key driver behind improving economic productivity and the country’s ability to compete, she added. "We’re stalling and losing ground," Golden said. While Canada may be a few steps behind our largest trading partner in terms of addressing the question of improved productivity, the province of Ontario is taking major strides towards enhancing its position. Premier Dalton McGuinty announced earlier this year the creation of the Ministry of Research and Innovation, a department he has decided to lead himself. The department has under its control $1.9 billion which it is going to invest in skills, training and commercialization efforts. The premier noted at the conference that the new ministry has developed a strategy that focuses on strengthening skills, improving healthcare, leveraging diversity and fostering innovation. The province must "foster this creative, even courageous thinking" and "we must make innovation inevitable" or strive to create a "culture of innovation," McGuinty said. The province is creating an advisory council to help identify areas where the money is most needed and to guide the province into the future. McGuinty announced in Ottawa last week that Adam Chowaniec, founder and chair of the board of directors of Tundra Semiconductor Corp., had been tapped to lead the advisory council. While Ontario appears to be heading in the right direction, a national strategy aimed at improving productivity has yet to be developed and isn’t likely to be discussed until the next government is formed. The Conference Board’s Golden suggests a number of reasons why there hasn’t been a productivity agenda in Canada. Developing a strategy for improving Canada’s productivity, said Golden, will mean "there will be winners and losers," making it difficult for politicians to elicit this type of strategy. In addition, productivity is a long-term vision while politics is a short-term game. Michael Sabia, president and CEO of BCE Inc., called for ICT adoption to be a national priority. "We need a co-ordinated, driven, focused, national strategy within Canada, an information technology leader on a global basis," he said. "This should become a national priority that would change the way we think about the use and distribution of technology."

Canada needs to do more to address lagging productivity, Ottawa conference told

News | December 21, 2005

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