OTTAWA (Reuters) - In order to maintain its traditional economic growth rate, Canada will need to rely increasingly on productivity growth as labor growth slows, Bank of Canada Governor Mark Carney said on Wednesday.
Carney told a parliamentary committee that increased labor supply had provided about two-thirds of Canada’s trend economic growth of 3.3 percent over the past 15 years. Higher productivity provided the rest.
That proportion will now have to be reversed in face of what he called the country’s “demographic challenge.” In other words, he said, productivity would have to rise by 2.2 percent to 2.3 percent. “That will be a real challenge,” he said.
Reporting by Randall Palmer; editing by Rob Wilson