News
Productivity and prosperity in Québec: Third Edition
The Centre for Productivity and Prosperity launched the third edition of its annual overview of labour productivity and standard of living trends in Quebec, today. “After three years of monitoring and analyzing productivity and prosperity in Quebec, one thing is clear: if Quebec’s standard of living lags behind that of the main industrialized economies, it is essentially because labour productivity here is not rising quickly enough,” says Robert Gagné, the Centre’s Director. “In fact, the observed gaps have been widening, not shrinking, over the past 30 years. This finding applies to Canada as a whole.”
The 2011 Overview paints a detailed portrait of Quebec's economic performance and compares it with that of some 20 industrialized countries, including Canada and the United States, and with Ontario and other Canadian provinces.
For more information, consult the third edition of the report Productivity and prosperity in Quebec - 2011 Overview.
The effect of fiscal policy on productivity
In their research study “Fiscal Policy, Productivity and External Adjustment: a Comparative Study”, the authors, Hafedh Bouakez, Foued Chihi and Michel Normandin evaluate the effects of unexpected tax cuts and increases in public spending on output, labour productivity, the current account and the real exchange rates in four industrialized countries, namely, Canada, the United States, Australia and the United Kingdom.
Technology shocks: a short term sacrifice stimulating long term growth?
Surprisingly, it seems that technology are not significantly contributing to economic growth in the short run, as the research study “What is the impact of technology shocks on the fluctuation of the Economy?” reveals. On the contrary, they appear to be detrimental to the economy’s performance.
Most studies on the subject used total factor productivity (TFP) as a proxy for technology shocks, namely the change in the output that cannot be explained by the change in the quantity of input used, such as workforce or physical capital. Researchers Nicolas Vincent, Nathan Bedock and Pierre-Olivier Lachance, on the other hand, decided to turn to patent data from 1978 to 2007 to measure these shocks.
Gas Stations in Quebec, on the Technological Fringe
Consumers in Quebec suffer from a more limited service in the province than elsewhere in Canada when they need to fill up, as there are less large gas stations. Large-scale chains offer more services such as electronic payments, car washes, or convenience stores. Other provinces benefit from these higher quality stations, while Quebec remains mainly dominated by smaller retailers.
How to Make the Most of the Use of New Technologies?
New technologies are useful tools for organizations to innovate and then improve their performance. However, using these technologies is not the same thing as innovating with them.The study Understanding Innovation Associated with Information and Communication Technology (ICT) reports an analysis of a dozen of companies which achieved remarkable innovations using ICT. It also illustrates the conditions that must be satisfied if ICT is to provide strategic leverage.
Canada and Quebec: Ineffective Innovators
Canada is one of the most generous of all OECD members in terms of publicly funded research and development (R & D). However, according to a study entitled La performance québécoise en innovation by Robert Gagné and Pierre-Olivier Lachance, when it comes to registering patents, Canada’s performance is poor indeed. The same holds true for Quebec.
Rising exchange rates discourage investment
The rising Canadian dollar in recent years could be responsible for companies’ reluctance to purchase machinery and equipment.
Canada, and Quebec in particular, lag far behind the United States in terms of investment in information and communications technologies. Since Canadian firms buy most of this kind of equipment from our American neighbours, many commentators cited Canadian firms’ weak buying power in the 1990s as the reason.
The province is upgrading our transportation infrastructure
Since the 2006 collapse of the De la Concorde overpass, Quebec has been investing massive amounts to renew its transportation network—amounts that, owing to the underfunding of the ’80s and ’90s, will only be that much higher. Long missing from the government’s agenda, the road network has deteriorated to the point that it is now one of the country’s most dilapidated. According to the Centre for Productivity and Prosperity, this neglect could well have adversely affected productivity growth.
Did you know
When the Canadian dollar rises, exporters companies experience a decrease in the revenue they obtain in US dollar, which deters them from investing in information and communications technologies.
