March 27, 2024, 11:27 AM

BMO Comments on Canada's Productivity "Emergency"

Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers gave a speech Tuesday on productivity that every policymaker in the country needs to read, said Bank of Montreal (BMO).

It's no coincidence that flat per capita real gross domestic product (GDP) in the past decade (up all of 1.7%) is tied to the dismal trend in labor productivity (up 4.0%, or 0.4% annualized and less than half the rate of the prior decade, noted the bank.

One reason for the latter is declining business spending on the machines and tools that workers need to be effective, stated BMO.

According to the bank, the solution to the investment drought is straightforward: enact policies that incentivize investment. Will the April 16 Federal Budget "break the glass"?

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