Moreover, while the large rise in China’s share is also affecting other countries, a number of countries, notably Mexico, have fared relatively better than Canada. Over the same period, Canada’s competitiveness has declined, with a sharp rise in the labour cost of producing a unit of output in Canada compared with other countries, adjusted for exchange rate movements.
The Organisation for Economic Co-operation and Development (OECD) calculates that the Canadian real exchange rate in terms of unit labour costs has appreciated about 17 per cent since the beginning of 2005. The bilateral Canada-U.S. measure shows a 31 per cent increase in relative Canadian unit labour costs over the period.