The shocking collapse in Canadian productivity: in spite of the Liberals’ best efforts, or because of them?

[CdnFox]

https://archive.ph/FXyv2

Canada’s economic problem is no longer slow or slowing productivity growth. It is declining productivity, in absolute terms – and not occasionally, or tentatively, but steadily, and without much prospect for improvement.

The problem is not that we have too much labour, but too little capital – machinery and equipment – for labour to work with. As a recent study for the C.D. Howe Institute has shown, the alarming deterioration in our already poor productivity performance closely tracks the extraordinary collapse in business investment in Canada in recent years – to levels that are not only lower than in other countries (the study estimates new capital per worker in Canada at less than $15,000 in 2022, compared to $20,000 in other OECD countries and almost $28,000 in the United States), but lower than the amount required to replace existing capital as it wears out or grows obsolete.

No one can say they failed to deliver on the policies. A short list would include the Canada Infrastructure Bank; the “superclusters” program, designed to create world-beating hives of activity in selected sectors in cities across Canada; Innovative Solutions Canada, a program to boost startups through government procurement; the Strategic Innovation Fund; the various government-sponsored venture-capital funds administered by the Business Development Bank; all the way to the Canada Growth Fund, the Canada Innovation Corporation (the renamed Canadian Innovation and Investment Agency), and the massive subsidies for battery manufacturers of more recent budgets.

All those agencies, all those acronyms, all those billions, and what is the result?

 

Falling capital stock, falling productivity and falling relative living standards – year after year after year. I can’t imagine a more perfect test of Liberal economic theories, or a more complete failure.

 

 

The people who are going to suffer as a result of all of this are the very people "liberals" claim to care about. The liberals have turned us into a declining nation.

[myata]

What "productivity"? Why? Double the prices in a year and that's like 100% GDP growth! Make (and keep) everybody wondering. Silly them.

[eyeball]

2 hours ago, CdnFox said:

The people who are going to suffer as a result of all of this are the very people "liberals" claim to care about. The liberals have turned us into a declining nation.

Many of our peers have declined as well since the globalization of trade in the 70's and investors in machinery invested in places where labour, regulations and environmental protection were a lot cheaper.

I don't know about Liberals, "liberals" or liberals but lefties were pointing out the beginning of the decline 50 years ago. Conservatives, "conservatives" and conservatives all said they cared as much as Liberals, "liberals" and liberals 

In the meantime...

Quote

 

Measuring productivity in Canada shows that annual productivity growth has actually declined since the 1970s. Many of Canada’s peers, however, have also experienced a decrease in productivity growth over the past four decades. Canada’s improved letter grade—from a “D” in the 2000s, to a “C” for 2010–12 and a “B” in 2012—merely reflects its improved relative performance.

https://www.conferenceboard.ca/hcp/measuring-productivity-canada-aspx/

 

 

Edited July 5, 2023 by eyeball

[CdnFox]

1 hour ago, eyeball said:

Many of our peers have declined as well since the globalization of trade in the 70's and investors in machinery invested in places where labour, regulations and environmental protection were a lot cheaper.

Oh? Which of our peers is that? Not the ones in your 2012 paper, that was a blip after the great recession. They're all up now.

Quote

don't know about Liberals, "liberals" or liberals but lefties were pointing out the beginning of the decline 50 years ago.

Nope. They were the cause of the decline 50 years ago. That would be right when Trudeau the first got in, and started HIS runaway spending and driving off business investments and within less than a decade we had stagflation and high interest rates which crippled investment. 

Sound familiar?

And 2012 isn't "in the meantime" - thats more 'like "today in history... "

In the last 7 years Business investment per worker has been nose diving.

https://www.fraserinstitute.org/sites/default/files/business-investment-per-worker.pdf

The gap between Canada and the United States increased significantly after 2014 as real business investment began to decline in Canada. In 2014, Canada invested about 79 cents per worker for everydollar invested in the United States; in 2021, investment was 55 cents for every US dollar.

 

So we're driving business investment away. And that means much lower wage growth, lower gdp growth, and a much weaker economy and lower standard of living.

 

[eyeball]

3 hours ago, CdnFox said:

So we're driving business investment away. And that means much lower wage growth, lower gdp growth, and a much weaker economy and lower standard of living.

I'm simply saying we're doesn't include the left which I assumed was probably as much the case you were making as anything.  When you're talking about Liberals and the beginnings of the decline in Canada's productivity it was attended too just as heartily and caringly by Conservatives. This was recently pointed out in another thread in which it appeared Conservatives, "conservatives" and conservatives were forgotten and overlooked in the scheme of things going sideways or backwards in the economy. 

As for declines during the last 10 years, don't look at me, the only time I voted Liberal is when Trudeau Sr lost and I've never voted for a Conservative.  I see little reason to believe productivity will improve under Poilievre given how more focussed he appears to be on the insensitivities of his base of support towards homos and treating climate change measures like they were pandemic measures. 

In any case I'm doing my bit, my own productivity has never been higher and I've been a lefty for damn near 50 years.

[CdnFox]

3 hours ago, eyeball said:

I'm simply saying we're doesn't include the left

Well it did absolutely include the left. Left wing gov'ts both provincial and federal, left wing trade unions, more recently the left's support of things like higher taxes and carbon tax - without a doubt it included the left.

Quote

When you're talking about Liberals and the beginnings of the decline in Canada's productivity it was attended too just as heartily and caringly by Conservatives.

Not at all. Conservatives made MASSIVE steps forward into improving the situation. The GST made us more competative, conservatives lowered taxes on businesses and created stable environments, harper did tonnes of trade deals (which trudeau has squandered), the free trade agreement increased trade ten fold with the us, there were numerous improvements in productivity under conservative gov'ts.

 

Quote

This was recently pointed out in another thread in which it appeared Conservatives, "conservatives" and conservatives were forgotten and overlooked in the scheme of things going sideways or backwards in the economy. 

The economy has done far better under conservatives both federally and provincially since the 70's. They're far from perfect but they do a lot more to attract and give confidence to businesses.

Quote

As for declines during the last 10 years, don't look at me, the only time I voted Liberal is when Trudeau Sr lost and I've never voted for a Conservative. 

Then you voted ndp or green which means you either supported the liberals anyway or might as well not have voted at all.  Either way - sorry but you get to wear a little of this.

Quote

I see little reason to believe productivity will improve under Poilievre given how more focussed he appears to be on the insensitivities of his base of support towards homos and treating climate change measures like they were pandemic measures. 

Then you have a perception problem. Those issues are not related.

Quote

In any case I'm doing my bit, my own productivity has never been higher and I've been a lefty for damn near 50 years.

Wow - don't tell me you've worked up to being worth HALF of what you're paid now? Good for you!!!  (snicker )

It is interesting to me to note that the one positive blip was during the covid lockdown period - productivity went way up. Maybe there's something to be said for htis working from home business.

 

[myata]

14 hours ago, CdnFox said:

Nope. They were the cause of the decline 50 years ago.

How can you not see this? Any natural governing party in Canada has to be Liberals. Ideology driven, entitled, arrogant and "generous", out of public, not its own, pocket (and with it, while we can). The system does it, and Liberals is only the product. Let's consider an example: an oven and a toilet, they produce different output, and outcomes. It would be cra.. OK, incredibly naive to expect to fish a yummy cake in the canalization. No?

[Nationalist]

This all just reinforces my point that liberal policies produce the opposite effect to how they are sold to the public.

In our case, Pixie-Dust has made such a mess of our tax position and regulations, that investment goes elsewhere.

[eyeball]

8 hours ago, CdnFox said:

Well it did absolutely include the left.

Not my part of the left. 

[Queenmandy85]

19 hours ago, CdnFox said:

Canada’s economic problem is no longer slow or slowing productivity growth. It is declining productivity, in absolute terms – and not occasionally, or tentatively, but steadily, and without much prospect for improvement.

The problem is not that we have too much labour, but too little capital – machinery and equipment – for labour to work with.

And yet, for the first time in years, we have full employment...for now.

[Queenmandy85]

Any shortage, in this case, capital, is not a problem It is a business opportunity. If anyone wants to make real money, forget being a lawyer,  social worker or You Tube influencer. Go to a trade school and learn a trade. Then join a union. That is where the real shortage is.

Or, start investing in the growth industies to come...Rail, nuclear power , banking.

[eyeball]

5 minutes ago, Queenmandy85 said:

And yet, for the first time in years, we have full employment...for now.

We still don't have full transparency or accountability...and never will given how many Canadian won't stand for it.

[Michael Hardner]

11 minutes ago, Queenmandy85 said:

And yet, for the first time in years, we have full employment...for now.

And GDP per capita continues to grow.

 

[Queenmandy85]

 

6 minutes ago, eyeball said:

We still don't have full transparency or accountability...and never will given how many Canadian won't stand for it.

I don't know what you are getting at, but if Canadians, according to you, won't stand for it, it isn't needed. In fact, if you want investor confidence, the cult of transparency will drive investors away.

Edited July 6, 2023 by Queenmandy85

[Michael Hardner]

The CD Howe paper seems to implicate housing prices and existing energy divestment.

Those are more like global trends aren't they?

[Queenmandy85]

8 hours ago, CdnFox said:

The economy has done far better under conservatives both federally and provincially since the 70's. They're far from perfect but they do a lot more to attract and give confidence to businesses

Given, we haven't had a Conservative Party federally, for years, that ship has sailed. I live in hope it returns.

[Aristides]

14 minutes ago, Michael Hardner said:

And GDP per capita continues to grow.

 

The  biggest single component of our GDP is real estate. My home has more than doubled since I bought it 11 years ago. Still the same home just 11 years older. Our increase in GDP has little or nothing to do with productivity.

https://www.statista.com/statistics/594293/gross-domestic-product-of-canada-by-industry-monthly/

Edited July 6, 2023 by Aristides

[CdnFox]

1 hour ago, myata said:

How can you not see this? Any natural governing party in Canada has to be Liberals. Ideology driven, entitled, arrogant and "generous", out of public, not its own, pocket (and with it, while we can). The system does it, and Liberals is only the product. Let's consider an example: an oven and a toilet, they produce different output, and outcomes. It would be cra.. OK, incredibly naive to expect to fish a yummy cake in the canalization. No?

Sure there's some truth to that, but it tends to go in 'wavess'.  In the 70's and early 80's  it was all about spend spend spend give me my freebies till the economy tanked.  Then people wised up for  a long time - mulrioney was far less like that and was hugely popular and chretien was closer to a conservative than a traditional liberal in many of his budgets and it's what people demanded. (of course he was getting envelopes full of cash under the table but that's a seperate story)

Harper was also elected on the idea of fiscal responsiblity.

It's the millenials and some of the retired people in certain geographic areas that FORGOT those lessons and wanted trudeau back on a 'give me freebies" and "feminnism is more important than the economy".

Eventually those losers will realize that they have a lower quality of life as a result of that choice. And we will probably see 15 or 20 years of more right leaning governments as people can barely get by.

Its like the old saying goes: a conservative is a liberal who's been mugged. After having their futures stolen by Trudeau young people will realize it makes no sense whatsoever for the Liberals to be any kind of “natural ruling party”. Then things will get better and eventually the next generation will forget and have to pay the same price.

[I am Groot]

12 hours ago, eyeball said:

As for declines during the last 10 years, don't look at me, the only time I voted Liberal is when Trudeau Sr lost and I've never voted for a Conservative.  I see little reason to believe productivity will improve under Poilievre given how more focussed he appears to be on the insensitivities of his base of support towards homos and treating climate change measures like they were pandemic measures. .

Afaik Poilievre has largely ignored the concerns of much of his base about most culture issues. He'll toss off a sentence here and there, but most of his attention has been on the economy, housing, budget deficits, etc. If he wanted to please his base he'd talk more about crime and the deplorable state of our military. I haven't heard him say one word about 'homos' 

Climate change, on the other hand, is seeming more and more like an impossible mess. Nothing we do, however much we strive to bankrupt ourselves over it, is going to make an iota of difference. The increasing cost of energy, as well as high taxes, have a lot to do with poor productivity, though. And this government has been on the wrong side of both issues. Note that the productivity falls started the year Trudeau took office. Coincidence? 

[I am Groot]

26 minutes ago, Michael Hardner said:

And GDP per capita continues to grow.

 

Our GDP per capita was lower last year than it was in 2018 and is expected to decline over the next two years.

https://tradingeconomics.com/canada/gdp-per-capita

https://www.theglobeandmail.com/business/article-why-gdp-per-capita-is-becoming-the-indicator-to-watch/

Edited July 6, 2023 by I am Groot

[CdnFox]

50 minutes ago, eyeball said:

Not my part of the left. 

Did you vote ndp?  Your part of the left.

[CdnFox]

25 minutes ago, Michael Hardner said:

And GDP per capita continues to grow.

 

No, it doesn't  It is falling.  You could have at least read the article.

It's been falling since about 2016. It went up very briefly during covid when everyone was working from home amusingly but even that is a bit of an illusion - the most productive people like professionals and health care workers continued working while waitresses and hairdressers were sent home, so it LOOKS like it went up briefly.

But no Michael - it's going down.

[CdnFox]

31 minutes ago, Queenmandy85 said:

Given, we haven't had a Conservative Party federally, for years, that ship has sailed. I live in hope it returns.

We had a conservative party under harper .  I suppose technically that's "years" but it's hardly ancient history.  Most of the time an elected gov't manages to stay in power for about 8ish years and trudeau will have managed that, but then we'll almost certainly be back to a conservative gov't under PP.

29 minutes ago, Aristides said:

The  biggest single component of our GDP is real estate. My home has more than doubled since I bought it 11 years ago. Still the same home just 11 years older. Our increase in GDP has little or nothing to do with productivity.

https://www.statista.com/statistics/594293/gross-domestic-product-of-canada-by-industry-monthly/

You don't think someone is building those homes? Or selling them?

I'm not sure you're clear on what 'productivity' means.

[eyeball]

1 hour ago, Queenmandy85 said:

I don't know what you are getting at, but if Canadians, according to you, won't stand for it, it isn't needed. In fact, if you want investor confidence, the cult of transparency will drive investors away.

In quite certain you do know what I'm getting at but like John Crosby said, 'if we (politicians) told you what we were going to do you'd never vote for us.'

I said many Canadians, not all.

AFAIC the only polarity Canadians should be concerned with is that which exists between the government and the governed.

IMO if you're with the government you're not with the governed.

[eyeball]

50 minutes ago, CdnFox said:

Your part of the left.

That's right.

50 minutes ago, CdnFox said:

Did you vote ndp? 

They lost me with Mike Harcourt and Glen Clark clinched the deal breaker. No I didn't vote for Gordon Campbell.