Productivity: BC's Position and Why We Should Care

September 6, 2013
Ken Peacock

Over the long term, productivity levels and growth rates are the most important factors determining the evolution of the standard of living in any economy. In more productive economies workers typically receive higher wages and governments have more resources available to pay for services.


  • Productivity growth is essential to advancing living standards over the medium to long run. Productivity is not mainly about working harder or longer. Rather, it involves producing more output with the same or fewer hours of work.
  • Productivity gains are important in enabling rising real wages over time, a fact which is consistent with empirical observations across industries as well as jurisdictions.
  • BC’s productivity performance over the past five years is underwhelming. Output per hour worked in 2012 stood at $43.60, which is in line with Ontario and Quebec but well behind Alberta and Saskatchewan. Among the provinces, BC ranks sixth in business sector productivity.
  • BC’s aggregate productivity increased by only 2.8% over the last half decade, which translates into an annual growth rate of approximately 0.5%. Again, BC is a middling performer on this measure, ranking fifth among the provinces in business productivity growth.
  • Improving productivity is a complex undertaking. Much of the responsibility for doing so falls on enterprise managers and owners, but public policy also plays a role. Boosting investment in human and physical capital, streamlining regulations, attracting top talent, fostering innovation, and supporting growth in high productivity industries can all help to advance productivity over the medium term.

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