JANUARY 2014
Stephen Harper should take economics lesson from Henry Ford
The Toronto Star -- January 13, 2014

An opinion piece by Toby Sanger, an economist for the Canadian Union of Public Employees, with a mention of an article in the fall issue of the productivity monitor.

The opinion piece cites the research done by Rao and Li that shows the productivity killer in Canada is weak demand for Canadian products.

DECEMBER 2013
Weak Demand, Not Productivity, to Blame for Slump, Research Shows
The Globe and Mail -- December 10, 2013

Experts have long assumed that the solution to Canada’s decade-long productivity slump is to get companies to innovate and invest more, typically via tax incentives. But new research, by independent economist Someshwar Rao and Jiang Li of the University of Victoria, suggests it’s a much broader problem. The real productivity killer, they argue, is weak demand for everything that Canada produces.

Fully 93 per cent of the huge drop off of productivity in Canada from 2000 to 2012, compared with the 1990s and 1980s, can be traced directly to a drop in after-inflation GDP growth, according to a study to be published Tuesday in the fall issue of the International Productivity Monitor.

AUGUST 2013
NL Productivity Leads Country Because of Oil
The Telegram -- August 29, 2013

Newfoundland and Labrador’s labour productivity leads the country, fuelled by the oil boom of the last decade, according to a report coming from the Centre for Applied Research in Economics (CARE) at Memorial University. The report is the first thing to come out of CARE since its inception last fall, and it looks at productivity in the economy.

“Productivity is a very useful concept. In the long run, it is the driver of growth in living standards,” said Andrew Sharpe, one of the study’s authors. “Regular people should care about productivity growth. It determines their potential real wages since it determines the amount of real output that an hour of work can produce.”

JUNE 2013
Five little-known trends in Canadian living standards
The Globe and Mail -- June 4, 2013

Canadian living standards have shifted dramatically in the past decade – but not all trends are clear to the eye.

Some changes are visible – houses have gotten pricier, more people are working in services jobs and the West still carries much of the country’s economic vigour. Others – such as a drop in child poverty rates and still-elevated long-term unemployment – have happened below the surface.In a new presentation, Andrew Sharpe, executive director of the Centre for the Study of Living Standards, explores five little-known economic developments in the country.

CSLS presentation mentioned:
Five Little-Known Developments in Canadian Living Standards

MAY 2013
Canadian businesses spend far less on software than in U.S.
The Globe and Mail -- May 29, 2013

One of the enduring mysteries of the North American economic landscape is that Canadian businesses chronically spend less on information and communications technology than their American counterparts.

Economists have long speculated about the reasons why, including data collection anomalies, differences in industry structure, the preponderance of smaller companies in Canada and greater U.S. wealth. A study released Wednesday by the Centre for the Study of Living Standards for Industry Canada confirms that apples-and-oranges data comparisons account for a significant piece of the puzzle.

CSLS report mentioned:
Can the Canada-U.S. Investment Gap Be a Measurement Issue?

APRIL 2013
Productivity overrated as key to growth, report says
The Globe and Mail -- April 10, 2013

Jobs, not productivity, may be the secret to Canada’s economic strength, according to provocative new research.

An abundant supply of labour is the key ingredient that has allowed Canada to expand its economy over several decades despite disappointing productivity gains, a trio of economists from the U.S. Federal Reserve Board and the International Monetary Fund argue in a report to be published Wednesday in the International Productivity Monitor.

International Productivity Monitor article mentioned:
Productivity or Employment: Is It a Choice?, Number 25, Spring, 2013

DECEMBER 2012
Has Productivity Growth in Canada Been Stronger than Originally Thought?
Conference Board of Canada -- December 24, 2012

There has been much hand-wringing in Canada over the country’s woeful productivity performance over the last 25 years or so. This concern is warranted because productivity growth is vitally important to raising living standards and enhancing the competitiveness of firms.

But a new economic research paper by W. Erwin Diewert and Emily Yu claims that Statistics Canada has been underestimating MFP growth for years, raising hopes that Canada’s productivity performance has been stronger than Statistics Canada suggests. By building new estimates for GDP growth, capital input growth and labour input growth, they were able to deduce new estimates of MFP growth. In fact, Diewert and Yu find that MFP growth in Canada averaged 1.03 per cent per year from 1961 to 2011. This compares with Statistics Canada’s average annual MFP growth estimate of 0.28 per cent per year over the same period, a significant difference of 0.75 basis points per year. If Diewert and Yu’s calculations are indeed closer to reality than those of Statistics Canada, it would help to explain why economists and other analysts have been left scratching their heads over the apparent failure of many productivity-improvement policy changes that have been enacted by the federal and provincial governments over the years.

International Productivity Monitor article mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012

Erwin Diewert, a professor of economics at the University of British Columbia, never went to an American Ivy League school. He earned a B.A. and an M.A. in mathematics from UBC, before obtaining a Ph.D. from the University of California at Berkeley. Maybe that’s why he’s not afraid to take a position and run with it.

In an article published in the fall number of the International Productivity Monitor – fetchingly titled, “New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011 – he and his co-writer, Foreign Affairs Department economist Emily Yu, effectively debunk almost half-a-century of received wisdom about Canada’s perennial lack of economic fecundity.

International Productivity Monitor article mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012

OECD Econmics Survey: Canada 2012 tells us, and I’m sure it comes as no surprise to many, that Canada is lagging behind the United States in terms of productivity and has been for a while. Actually according to this report we are lagging behind many other countries including Chile, Norway and Israel.

What may come as a surprise is the findings in a new paper from leading Canadian economist Erwin Diewert. The Globe and Mail article Why Canada’s productivity has been underestimated for decades summarizes the report by Diewert.

The world-renowned productivity expert is challenging the process that is being used to calculate multifactor productivity in our country and thinks we have been underestimating our productivity as far back as the 1960s. According to Prof. Diewert and Ms. Yu the main problem comes in Statscan’s overestimation of capital input growth.

International Productivity Monitor article mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012

William Watson’s interesting piece on Canadian productivity actually points to a different conclusion than those drawn in the article. If one of the most eminent academics in the field (and a colleague) and Statistics Canada get different results it is not because one or the other is wrong, it is because measures of multi-factor productivity (MFP) are worthless. If we dig a little deeper than Mr. Watson’s fine summary, into the origins of MFP, this becomes readily understandable.

In contrast with the intuitive intelligibility of labor productivity, MFP divides output by an index of variables, which has no clear economic meaning. A further problem, which is the apparent reason for the major part of the difference between the two studies, is that the measurement of capital is problematic.

Unfortunately, too many careers and too many consultants, who push MFP studies because they know how to do them, still depend on mining the worked-out ore of TFP/MFP, so I see no end to such pointless debates.

International Productivity Monitor article mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012

A learned controversy has raised some hope that Canada’s productivity-growth history is not as bad as had been thought, which serves to make the various efforts to improve the country’s productivity seem better than merely futile.

Erwin Diewert, an economist at the University of British Columbia, and Emily Yu, of the Department of Foreign Affairs, argue in a paper in the International Productivity Monitor this week that Canada’s multifactor productivity has been understated, because (they believe) capital inputs have been overstated – productivity being a proportion of a set of inputs to the value of the resulting output. They conclude that Canadian productivity growth from 1961 to 2011 has not been stellar but “reasonably satisfactory” – an average of 1.03 per cent a year, rather than a meagre 0.28 per cent.

International Productivity Monitor articles mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012
Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu, Number 24, Fall, 2012
Difficulties Assessing Multifactor Productivity for Canada, Number 24, Fall, 2012

International Productivity Monitor articles mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012
The Long-term Outlook for Productivity and Per Capita Income Growth for Canada:A Comparison with Selected G-20 Countries, Number 24, Fall, 2012

Canadian business productivity has been systematically underestimated for decades, according to provocative new research.

Erwin Diewert, a leading Canadian economist and world-renowned productivity expert, concludes in a new paper slated to be published Wednesday that Statistics Canada has badly underestimated the growth of so-called multifactor productivity as far back as the 1960s. Multifactor productivity is considered a proxy for a country’s innovation performance, encompassing technological change and other efficiencies. It’s a more comprehensive indicator than labour productivity because it incorporates all the factors that contribute to growth – capital, energy, materials, services as well as labour. It’s regarded as the most important source of higher living standards.

Official Statscan data suggesting that productivity has been falling in Canada since 1977 “doesn’t really make a lot of sense,” pointed out Andrew Sharpe, executive director at the Ottawa-based Canadian Centre of the Study of Living Standards. “It means that we’re not doing as bad as we thought,” he said.

International Productivity Monitor articles mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012
Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu, Number 24, Fall, 2012
Difficulties Assessing Multifactor Productivity for Canada, Number 24, Fall, 2012

The good news just keeps pouring in. Last week we learned courtesy of a special report from TD Economics that median income in Canada had caught up with median income in the U.S. Never mind that the measure of income used was a little screwy: market income plus cash received from the government — basically all the goodies — with no accounting for taxes paid to the government. Most Canadians seemed tickled by the result anyway, as we always are when outperforming the Americans.

You can get a sense of the complication by having a glance at the papers in the Centre for the Study of Living Standards’ symposium, where Erwin Diewert of the University of British Columbia and Emily Yu of the Department of Foreign Affairs and International Trade presented their startling new results on productivity.

International Productivity Monitor article mentioned:
New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011, Number 24, Fall, 2012

SEPTEMBER 2012
Governments effective in softening the edges of income inequality: study
The Canadian Press-- September 27, 2012

Government matters — a lot — when it comes to income inequality, a new study suggests.

Researchers at the Ottawa-based Centre for the Study of Living Standards looked at how much taxes and government benefits helped to even things out between the rich and the poor in Canada over the past three decades.

They found that taxes and spending have persistently dampened inequality, but not enough to stop the increase in inequality over time. And they found there is still ample room for governments to be more aggressive in using policy to reduce inequality, since redistribution efforts appear to be far lower here than in other industrialized countries

CSLS report mentioned:
“The Impact of Redistribution on Income Inequality in Canada and the Provinces, 1981-2010,, September, 2012

Forget about record debt levels, the harsh winters or long hospital wait-times.

Canadians are a very happy bunch, and we’ve grown increasingly content with our lot in life over the past decade, according to a report being released Tuesday by the Ottawa-based Centre for the Study of Living Standards.

The happiest Canadians are 12 to 19 years old and Quebeckers, while the least satisfied are seniors, according to the report, based on an analysis of Statistics Canada data from 2003 to 2011.

CSLS report mentioned:
Canadians Are Happy and Getting Happier: An Overview of Life Satisfaction in Canada, 2003-2011, September, 2012

If you're happy and you know it, a new report suggests you might be from Canada.

The Centre for the Study of Living Standards says more than 90 per cent of Canadians surveyed report they are either satisfied or very satisfied with their lives.

The centre tracked numbers collected by Statistics Canada in its community health survey between 2003 and 2011.

CSLS report mentioned:
Canadians Are Happy and Getting Happier: An Overview of Life Satisfaction in Canada, 2003-2011, September, 2012

JULY 2012

BRIGHTON: Study links poor productivity to N.S. focus on jobs strategy
The Chronicle Herald -- July 1, 2012

Prepared by the Centre for the Study of Living Standards in Ottawa, the report concludes “that the Nova Scotia-Canada labour productivity gap is accounted for by weak investment in machinery and equipment and business R&D and that human capital played a small role.”

CSLS report mentioned:
A Detailed Analysis of Nova Scotia's Productivity Performance, 1997-201, June, 2012

JUNE 2012

Don’t blame resource sector for lack of innovation: study
The Globe and Mail -- June 26, 2012

Canada has an innovation problem, but it can’t be pinned on the performance of the booming oil sands and mining industries.

The resource sector scores higher than most other Canadian industries when it comes to innovation, concludes a report released Friday by the Ottawa-based Centre for the Study of Living Standards.

CSLS report mentioned:
Innovation in Canadian Natural Resource Industries: A System-Based Analysis of Performance, Policy and Emerging Challenges, June, 2012

New benchmarks show some improvement in aboriginal quality of life
The Canadian Press -- June 29, 2012

A new federal report that probes the quality of life among Canada's aboriginal peoples shows the gap between aboriginal and non-aboriginal is glaring — but not quite as bad as it used to be.

The government-commissioned report is meant to set a baseline to compare aboriginal and non-aboriginal standards of living in the future.

It also sets out a range of goals to get rid of the gap completely, within 10 years — targets even the report's chairman says are on the "bold" side.

CSLS report mentioned:
Aboriginal Labour Market Performance in Canada: 2007-2011, June, 2012

MAY 2012

Alberta grabs UN well-being index’s top spot in Canada
The Globe and Mail -- May 18, 2012

Having resources the world wants is one way to a better life – at least, as measured by the United Nations’ well-being index.

Alberta grabbed top spot among Canadian provinces and territories in 2011 on the so-called human development index, which tracks life expectancy, education and income, according to a report being released Friday by the Ottawa-based Centre for the Study of Living Standards.

That’s the same spot Alberta held down in 2000.

The report marks the first time that HDI – typically used to compare countries – has been applied to provinces.

CSLS report mentioned:
The Human Development Index in Canada: Estimates for the Canadian Provinces and Territories, 2000-2011, May, 2012

Quality of life across Canada depends on where you live, says study
Ottawa Citizen -- May 18, 2012

Canadians are used to hearing their country ranks among the world's best places to live, but new research suggests that quality of life can depend a lot on where you live.

The first-ever quality-of-life comparison of provinces and territories to other countries suggests that while most Canadians live as well as anyone in the world, others are well down the list.

"I would think (the gap) is bigger than other countries in general," said Andrew Sharpe, director of the Centre for the Study of Living Standards, which released the results of its study early Friday.

"The gaps are so large."

Sharpe's team took the Human Development Index and applied it to provinces and territories. The index is a statistical tool in wide use around the world combining factors such as health, education and income to compare how well people in various countries live.

CSLS report mentioned:
The Human Development Index in Canada: Estimates for the Canadian Provinces and Territories, 2000-2011, May, 2012

APRIL 2012

The Three Wedges That Separate Workers From Their Pay
Bloomberg Businessweek -- April 27,2012

In 1994, economists Lawrence Mishel and Jared Bernstein were first to point out the gap that was already opening up between pay (low) and productivity (high). Bernstein later served as Vice President Joe Biden’s chief economist and is now a senior fellow at the Center on Budget and Policy Priorities. Mishel is president of the Economic Policy Institute.

Now, Mishel has done the most careful study to date of what accounts for the productivity/pay gap. He wrote a blog post called “Understanding the wedge between productivity and median compensation growth” on April 26. He also has a longer article on the EPI website. And if that’s not enough, there’s a technical article by Mishel and Kar-Fai Gee of Canada’s Center for the Study of Living Standards published in that center’s International Productivity Monitor.

International Productivity Monitor article mentioned:
Why Aren’t Workers Benefiting from Labour Productivity Growth in the United States?, Number 23, Spring, 2012

How government should play the innovation game
The Ottawa Citizen -- April 24,2012

Here’s a book you may want to have a look at when it’s published next month by the University of Toronto Press. It’s called Innovation Reinvented: Six Games that Drive Growth, by Marcel Côté and Roger Miller. Côté is a founding partner of Secor, the Montreal business consultancy, and was a senior adviser in both Ottawa and Quebec City during the Mulroney-Bourassa years. Roger Miller is a prof at the École polytechnique de Montréal.

In part, the book is about the age-old question of Canada’s lagging productivity. If you want a preview, there’s a short version in the latest issue of the Ottawa-based International Productivity Monitor — which, granted, doesn’t sound like a page-turner but in this case rewards effort, well, very productively.

International Productivity Monitor article mentioned:
Stimulating Innovation: Is Canada Pursuing the Right Policies?, Number 23, Spring, 2012

Canadian government doing fine job of smothering competition
The Gazette -- April 14, 2012

A new study published this week in the Ottawa-based International Productivity Monitor points to Canadians' laggardly use of new computer technology as a key factor in the growing gap between business productivity in the U.S. and Canada.

Economists Michelle Alexopoulos and Jon Cohen at the University of Toronto conclude that the impact of new computer technology in Canada has lagged since the early 1970s, with a gap in total factor productivity opening up shortly afterward.

International Productivity Monitor article mentioned:
The Effects of Computer Technologies on the Canadian Economy: Evidence from New Direct Measures, Number 23, Spring, 2012

'Culture of comfort' the enemy of innovation, report says
The Globe and Mail -- April 12, 2012

On April 12, 2012, the Centre for the Study of Living Standards released the Spring 2012 issue of the International Productivity Monitor. The lead article Stimulating Innovation: Is Canada Pursuing the Right Policies? by Marcel Côté and Roger Miller from Secor argues that current policies to promote business innovation in Canada are not working and develops a new framework for understanding innovation.

Other articles are on new direct measures of the use of computer technologies in Canada and the United States and implications for Canadian productivity growth; the reasons behind the large divergence between labour productivity and real median wage growth in the United States over the 1973-2011 period; the relationship between educational attainment, employment rates and productivity in OECD countries; and the treatment in the national accounts of measures of volume output for education and health services.

International Productivity Monitor article mentioned:
Stimulating Innovation: Is Canada Pursuing the Right Policies?, Number 23, Spring, 2012

Ottawa’s Rising Firewall:Public service veterans sound the alarm on federal opacity
Literary Review of Canada -- April, 2012

CSLS publication mentioned:
New Directions for Intelligent Government in Canada: Papers in Honour of Ian Stewart, September, 2011

FEBURARY 2012

Hill Dispatches: Keeping good jobs in Canada
rabble.ca -- February 6, 2012

"Last year, Drummond wrote an article he entitled "Confessions of a Serial Productivity Researcher" in which he admits that most of the supposedly pro-productivity policies he has urged on government have not had any significant positive effect".

"And yet, Drummond writes in his piece for the Centre for the Study of Living Standards, Canada's productivity, measured by "output per hour worked," has not improved. It has, in fact, declined when compared to other similar countries".

International Productivity Monitor article mentioned:
Confessions of A Serial Productivity Reseracher, Number 22, Fall, 2011

Canada Income Inequality: Study Shows Government Policies Growing Less Effective At Narrowing Gap
The Huffington Post -- February 2, 2012

"As debate about income inequality mounts, a new study underscores how important public investment in social programs like education and health care is in narrowing the rich-poor divide".

CSLS report mentioned in this article:
A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well Being

JANUARY 2012

One’s chance at success shouldn’t be dictated by birth
Ottawa Citizen -- January 19, 2012

Reducing Income Disparities and Polarization
"Of the papers in this section, only one - that by Andrew Sharpe- suggests a significant rethink of the income support system that has been in place, with little change, for more than 20 years. Sharpe argues that our system should be underpinned by an equality of opportunity agenda, in which greater efforts are made to smooth out both financial and human capital starting points. At present, by contrast, we have a system that takes unequal starting point as a given, focussing instead on correcting the subsequent excesses of market allocations".

Andrew Sharpe's paper Income Redistribution in Canada is available on page 17.