All of these key determinants of productivity influence how "smartly" human and capital resources are used. And these determinants are, in turn, influenced by broader factors such as competition, openness to foreign trade and investment, macroeconomic policies, and the efficiency of financial markets. We all recognize that improving productivity is the key component to raising the standard of living of Canadians.
From 1996 to 2002, output per hour worked grew at just over 2 per cent, on average, a little faster than our undistinguished performance of the previous quarter century. This provided some reason for optimism. But over the past two years - while economists, business leaders, and policy-makers have talked about the need to raise productivity - output per hour has been essentially flat.