Productivity Doesn’t Stop at the U.S.-Canada Border

Canada’s economy isn’t as powerful as its southern neighbor’s, but it’s not because the Great White North’s workforce is less productive, according to a new study by Statistics Canada, the country’s central statistics agency.

The study examined why the GDP per capita in Canada is less than it is in the United States. Between 1994 and 2002, it was only 83 percent of the U.S. GDP per capita. Statistics Canada found that Canada’s workforce is actually 94 percent as productive as the American workforce–not such a big difference. Instead, the main reason for the GDP gap is that Canadians are less likely to work at all, and when they do, they work fewer hours.

The January 2005 issue of the Canadian Economic Observer analyzes the findings. According to the Observer: “The progress that has been made since the mid-1990s in closing the Canada/U.S. gap came not from improvements in productivity, but from improvements in the hours worked per capita in Canada relative to the United States.”

This is the first time the Canadian government has compared productivity levels in Canada to the United States. Past studies have only examined productivity growth rates.