But structural explanations only go so far.
Wendy Cukier, professor of entrepreneurship and strategy at Toronto Metropolitan University, argues that the structure of Canada’s economy sets the baseline for these challenges. “Canada is a country of SMEs, and most SMEs don’t have HR people or IT people,” says Cukier. “And so comparing the US, where half the companies are large organizations, to Canada, where 10 per cent are large organizations, is comparing apples to oranges.”
That reality matters. Smaller firms typically lack the scale to invest in advanced systems, specialized talent, or formal HR functions — all of which are associated with higher productivity, says Cukier. But that structure is only part of the story, as culture and organizational priorities also play a role — and not always in ways that help performance, she says.
“I think that dichotomizing productivity and performance on the one hand and culture, inclusion, and values on the other is a mistake,” she says. In some sectors, she adds, there has been “a bit of a shift away from a focus on performance, outcomes, productivity, to kind of a risk-adverse, make sure everyone feels good about themselves and don’t worry so much about outcomes.”
Innovation, risk, and HR’s role
If structural constraints explain part of the gap, organizational behaviour explains another, according to Jamie Bruno, Vice-President of People and Transformation at Ontario Tech University. Bruno says risk aversion is embedded in processes and policies.