Will your children be poorer than you are?

What gives? Are we still feeling the effects of the 2008/2009 downturn? Is this simply a result of a tough global economy that’s seen a weak recovery in the U.S., a second recession in the eurozone and a slowdown in key emerging economies like China? Or is there something more fundamental to the Canadian economy at work here?

A full four years after the financial crisis nearly ground the global economy to a halt, Canadian gross domestic product (GDP) growth continues to disappoint. After coming in just above 3% in 2010, it slipped below that mark in 2011. This year’s annual growth rate is expected to fall further, below 2%.
In a piece I posted last month, Six predictions for the Canadian economy, TD Economics’ Diana Petramala said the oft-cited global economic headwinds facing Canadian businesses are only part of the story. Our “poor productivity performance,” to use her words, is essential to understanding what ails us.

She’s right, of course. Canadian productivity has been slipping relative to the U.S. number since the early 1980s. A study released last year by Deloitte Canada reported that “Canadian output per worker is only 86% of American output.”  (more)