The Certified General Accountants Association of Canada (CGA-Canada) warns that Canada’s standard of living is at risk because of lagging productivity. The Global Competitiveness Report of the World Economic Forum confirms that Canada’s productivity growth is at its lowest in the last five years. In addition, Canada’s Global Competitive index points to a decrease in overall ranking from 9th place in 2002, Canada to 16th in 2006.
Today, CGA-Canada releases its report titled Fading Productivity: Making Sense of Canada’s Productivity Gap, which discusses the major causes of our decreasing competitiveness and its impact on productivity and our standard of living.
“Improving productivity is the way to raising prosperity,” says Anthony Ariganello, CPA (Delaware), FCGA, President and Chief Executive Officer of CGA-Canada. “A more productive economy means higher wages for individuals, bigger profits for business and increased revenues for government. With this new financial capacity, individuals, businesses and government will be in a better position to allocate their increased resources to pursue their goals.”
In the past ten years, Canada’s productivity growth can be largely attributed to people working longer hours than working more efficiently. In a knowledge-based economy, Canadians need to work smarter not longer to boost productivity.
“Canada’s dwindling productivity growth can be attributed to low rates of capital investment, weak investment in higher education, poor quality of math and science education at the secondary level, a reduction in employer-supported job training, barriers to private/public partnerships, restrictive government policies inhibiting the market openness of Canadian businesses and the cost of complying with excessive regulations by small and medium-sized enterprises (SMEs),” said Rock Lefebvre, CGA-Canada’s Vice-President, Research and Standards.
Institutional corruption and inefficiency, particularly within government, has also had a decidedly negative impact on productivity and competitiveness.
To reverse this trend, CGA-Canada calls on policy-makers and business leaders to invest in people, encourage innovation and efficiency in SMEs and increase government accountability.
“Investing in human capital by focussing more on math and science skills at the secondary level, spending more on post-secondary education, increasing employer-sponsored training by introducing tax credits to stimulate more interest in continuing education for workers and for small and medium-sized businesses, will help boost productivity,” added Lefebvre.
CGA-Canada also believes it is necessary to promote business innovation and efficiency – that is, accelerate physical production and enhance quality by using technology – to bolster productivity. Increased productivity also relies on investment capital to finance new technologies – this capital must be made available to Canadian business. Expanding the Industrial Research Assistance Program which provides advice to SMEs on adopting new technologies and gives financial support to firms that demonstrate growth-oriented behaviour would also benefit business.
To stimulate innovation, regulations surrounding public-private-partnerships such as with industry and universities need to be streamlined, reduced and simplified. To maximize efficiency within their business operations, employers need to do a better job at matching workers’ skills, tasks and compensation.
“The government plays an important role in influencing the competitiveness of the nation; therefore, it is necessary to create an environment more conducive to competitiveness and productivity growth,” concluded Ariganello. “Increasing accountability and transparency in government, reducing the burden of regulatory requirements and foreign ownership restrictions especially in the telecommunications industry would improve Canada’s competitiveness.”
About CGA-Canada
CGA is the fastest-growing accounting designation in Canada. The CGA designation focuses on integrity, ethics and the highest education requirements. Recognized as the country’s accounting business leaders, CGAs provide strategic counsel, financial leadership, and overall direction to all sectors of the Canadian economy.
The Association sets standards, develops education programs, publishes professional materials, advocates on public policy issues, and represents CGAs nationally and internationally. The Certified General Accountants Association of Canada represents 68,000 CGAs and students in Canada, Bermuda, the Caribbean, Hong Kong, and China.
For more information, please contact:
Taylore Ashlie
Director, Communications
CGA-Canada
Telephone: 604 605-5055
Cell: 604 307-0212
Email: tashlie@cga-canada.org
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