Four factors explain our slow growth: taxes, regulations, incoherent innovation policy, and our penalizing scale rather than rewarding it

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Every major challenge confronting Canada today — underfunded public services, unaffordable housing, trade headwinds, fiscal constraints, weak innovation — traces back to a single root cause: stagnant productivity. Productivity is the engine of prosperity, yet Canada has been one of the weakest productivity performers among advanced economies, especially over the past decade.

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The numbers are sobering. In the 1980s, real per capita income stood at roughly 95 per cent the U.S. level. Last year it was just 71 per cent. Only $2,000 in 1980, the income gap with the U.S. was $22,000 in 2024. Over the past decade, while our weak per capita income barely moved; in the U.S. it rose $12,000.

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Two forces drive income growth: how many hours people work and how much they produce per hour. Our problem is not that Canadians are working less. It’s that they’re producing less. Over the past decade, the difference in income growth with the U.S. is all due to our weaker labour productivity.

Three forces drive labour productivity: workers’ skills, investment per worker and technological progress........

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