TORONTO (Reuters) - Sluggish increases in productivity and a lack of innovation are hampering economic growth in Ontario, Canada’s most populous province, a report released on Tuesday said.
The report, written by the province of Ontario’s Task Force on Competitiveness, Productivity and Economic Progress, said businesses must invest more in technology and bolster management techniques and practices to trim the province’s productivity gap with some U.S. states.
Ontario’s GDP per capita trailed the median score of 16 North American jurisdictions by 13.5 percent in 2009, the report said.
“This gap represents lost prosperity, which negatively affects Ontarians at all income levels,” it said.
Closing the gap with its North American peers would result in an increase of “C$10,100 in after-tax disposable income for the average Ontario household of 2.7 persons,” the report said.
It would also generate an extra C$31 billion ($30.4 billion) in tax revenues a year to be divided by municipal, provincial and federal governments.
“Ontarians are among the leaders in developed economies in work effort, hours worked per person, but we are laggards in creating economic value per hour worked,” said Roger Martin, chairman of the task force.
Last week, the Ontario government said it is on track to balance its budget in eight years as its export-oriented economy recovers from a deep recession and record-high deficits, despite persistent economic headwinds and new spending.
Reporting by Jennifer Kwan; editing by Peter Galloway