This study concerns the historical evolution of productivity in the province of Quebec and its impact on Quebecers’ living standards. Despite limited data on the subject prior to the mid-1970s, we can extract a reliable picture of the evolution of living standards and productivity in Quebec and draw comparisons with the other regions of Canada.

One historical fact that can be drawn from the study of the available data is that despite the existence of periods of economic convergence, Quebec has trailed behind Ontario since 1870. When compared with the rest of Canada as a whole, Quebec has not always lagged behind, but the advantage it did have faded and was even reversed in the years leading up to the Second World War.

Another conclusion emerges from the great changing trends in the economic evolution of Quebec. The first period, from 1870 to 1940, is characterized by the relative economic stagnation of the province. In fact, Quebec does succeed in becoming wealthier during this first period, but not enough to close the gap that separates it from the rest of Canada. Over the course of this period, the gap is explained primarily by the changing level of productivity of the Quebec economy.

During the second period, from 1945 to 1975, Quebec begins a significant economic convergence. However, over the course of this period, the effects of productivity are intermingled with the effects of federal transfers and of the divergence of labour market structures in the different regions of Canada. It nonetheless seems clear that rapid productivity growth is the determining factor in Quebec’s economic convergence, even if this effect is weaker after 1960. It is likely that economic growth relative to the other provinces from 1960 to 1975 is somewhat overestimated in the official statistics.

Finally, over the course of the last period, from 1975 to the present, Quebec began to stagnate once again relative to the rest of Canada, especially in terms of productivity. During this period, living standards were artificially stimulated by the effect of federal transfers and overestimated by changes in household structure in Quebec relative to the other provinces.

The general conclusion, sadly, is that Quebec has always lagged behind in terms of productivity, and as a result, has had a standard of living that, in reality, has always been lower than that of the rest of the country, from the very beginning of the Canadian Confederation.

 

To read more: Geloso, Vincent. Une perspective historique sur la productivité et le niveau de vie des Québécois : de 1870 à nos jours. Centre for Productivity and Prosperity, HEC Montréal, September 2013. (Available in French only)