As reported by Statistics Canada, gross domestic product contracted at an annual rate of 1.6 percent in the second quarter. The decline reflected a 7.5 percent drop in exports and weaker business investment, particularly in machinery and equipment.
Bloomberg added that per-capita output has slipped back to 2017 levels.
Canada’s lagging productivity has been a longstanding issue.
Bank of Nova Scotia economist Derek Holt noted that productivity has posted gains in only six of the past 21 quarters.
In 2023, Bank of Canada senior deputy governor Carolyn Rogers described the situation as “an emergency,” pointing to a steady decline in Canada’s output compared with the United States, from 88 percent in 1984 to 71 percent by 2022, as reported by the Financial Post.