A new Fraser Institute analysis has found that Canada has lagged Australian in capitalizing on its natural resources
Canadians’ standard of living could be better if more was made of the country’s natural resources.
That’s according to an analysis of Canadian productivity compared to that of Australia, where higher labour productivity growth has helped drive up living standards.
Earlier this year the Fraser Institute found that after decades of Canadians enjoying a higher standard of living than Australians, things had changed.
Fraser Institute senior fellow, Stephen Kirchner, has co-authored a paper called The Canadian-Australian Business Sector Productivity Gap: A Sectoral Analysis.
The research shows that greater improvements in Australia’s mining and energy sector has helped propel productivity growth, which in turn has helped boost average standard of living over time.
“The evidence is clear—Australian workers have improved their productivity at a higher rate than Canadian workers over the last 25 years, giving rise to a widening gap in living standards between the two countries,” he said.
Between 1995 and 2019, Aussies improved their labour productivity per worker by 1.6% every year, compared to 1.3% for Canadians.
Natural resources
The link with the mining and energy sector is evident with mining contributing 0.3 percentage points to the overall labour productivity growth of Australia but just 0.04 percentage points in Canada.
“For a number of reasons, Australia is an important comparator country for Canada, and in recent years, Australia has done a better job capitalizing on its natural resources than Canada,” said Kirchner.
