Canada’s lagging productivity and economic growth, especially relative to the United States, should be concerning.
For many, including me, it is very concerning indeed.
But there are some who argue that Canada does not, in fact, have a productivity problem at all.
According to recently published research, for example, “the observed stagnation during the last 20 years is accounted for entirely by the oil sector.”
“When [the researchers] netted out the oil components of the economy and looked at productivity in the rest of the economy,” explained a Globe and Mail article covering the paper last month, “they found it rose at about the same rate as in the past and compared with the U.S.”
The implications for some are “don’t worry about the productivity of the Canadian economy” and “Canada’s oil industry is a drain on productivity.”
I disagree. Strongly.
Far from being a drain, the oil industry—and the resource sector more generally—is a boon. Without it, we would be poorer and our economy worse.
