This impact paper studies the relationship between skills and productivity and finds that skills shortages have been detrimental to productivity growth in Canada. The author estimates that Canada’s GDP would be up to 1.8 per cent, or $49 billion, larger today if there had been no skills shortages over the past 20 years.
When skills shortages affect a group of related industries, the effect on aggregate productivity can be large. There have been two periods over the past 30 years where productivity growth was notably weaker in Canada than in the United States—between 2003 and 2012 and again from 2018. Skills shortages in goods-producing sectors and knowledge-based services industries explain around 7 per cent of the productivity gaps that opened over these periods.
Read the impact paper for a full analysis of skills shortages in Canada.
Cette publication est disponible en français.
Key findings
Canada’s productivity problem
Skills shortages lower productivity growth
Which skills do we need?
Understanding the context of skills shortages
How policy-makers can address Canada’s low productivity
Appendix A—Technical Methodology
Appendix B—Bibliography
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