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"CANADA HAS NO PRODUCTIVITY GROWTH" David Rosenberg says Canada's unit labour costs are rising around 8% annually, versus near 0% in the U.S. His warning: If nothing changes, the Canadian dollar may not stop at 1.50 USD/CAD... it could eventually head toward 1.60+. This is why productivity matters.

89,015 views • 1 month ago •via X (Twitter)

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Had so much fun chatting with Greg Kaplan (Greg Kaplan) and Michael Brennan of e61 Institute about Australia's stagnant productivity growth and how to fix it. The 2010s saw Australia's weakest productivity growth in 60 years. It was in many ways a lost decade. And it's dragging on—unlike the US, we haven't bounced out of covid with strong productivity growth. We discuss the extent to which this is being (i) caused by frontier-wide factors; (ii) caused by Australia-specific factors; and (iii) simply an artefact of how productivity is measured. We also go into a bunch of specific ideas, like: - why it could be better to densify Canberra than Sydney/Melbourne; - what should Albo do if he was bullish on AI; and - what we can learn from the stunning innovativeness of Australia's agricultural sector. And we discuss deeper questions around the role of government—as it's not really clear what levers the government currently has over productivity (at least for its *growth rate*). Links below. Enjoy! Timestamps: (0:00:00) - Introduction. (0:01:47) - Why has construction productivity stagnated—in Australia and the West? (0:08:38) - Can housing supply meaningfully grow just by improving construction productivity (without planning reform)? (0:12:50) - If construction and regulatory bottlenecks ease, what becomes the new supply constraint? (0:21:49) - Would densifying Sydney/Melbourne deliver big productivity gains—or should smaller cities scale? (0:29:48) - The most important limitations of GDP as a metric. (0:34:29) - Growth accounting in ~8 minutes: capital, labour, TFP. (0:43:04) - Is there a single “north-star” metric for policymakers? (0:47:12) - Should policymakers care more about TFP or labour productivity? (0:52:11) - Why revenue per worker is an imperfect proxy for firm-level productivity. (0:56:00) - Do these measurement critiques change what policy should do now? (0:58:25) - Stylised facts about the Australian economy. (1:04:01) - Status update on the health of the Australian economy. (1:06:43) - What would it take for Australia to be the richest country again? (1:11:23) - What growth rates are realistically achievable for Australia? (1:15:24) - How much GDP do we forgo over 10 years if weak productivity persists? (1:16:23) - Services, Baumol’s cost disease, and measurement. (1:29:18) - Lowest-hanging fruit for quality/productivity gains in services. (1:35:29) - Australia-specific vs frontier-wide causes of the slowdown. (1:39:51) - Best/worst Australian industries for TFP (i.e. “MFP”) growth over recent decades. (1:53:18) - Why has TFP slowed across almost every industry? (The chart behind the slowdown.) (1:59:41) - What is Australia’s “single most productive” company? (2:01:43) - Which industries have the biggest gaps between frontier and laggard firms? (2:07:53) - Is the median US firm more productive than its Australian counterpart, or is the US average skewed by superstars? (2:10:10) - What would Australian management look like if we converged on US practices? (2:13:15) - Why has the US—almost alone among rich countries—had strong recent productivity growth? (2:15:11) - How much of the US–Australia TFP gap is “culture”? (2:21:21) - Minimum reforms needed to restore 1–2% annual labour-productivity growth? (2:24:38) - Beyond Sydney/Melbourne: building (or scaling) new cities. (2:28:59) - If you were Anthony Albanese and bullish on AI, what would you do? (2:31:21) - How important is the CSIRO to Australia’s TFP? (2:33:02) - Three sensible reforms: tax; carbon pricing; road-user charging. (2:40:46) - Are the 1980s microeconomic reforms overrated? (2:44:33) - What levers reach the productivity growth rate—or is lifting levels the only game? (2:49:54) - Are we too concerned about the reform era ending? (2:56:12) - Most non-obvious lessons from the reform era.

Joseph Noel Walker

128,950 views • 1 year ago

Mark Carney was bragging abut how great things are and gave REAL evidence as to why... So lets fact check it: 1⃣ "Creating jobs at twice the rate of the United States" - A disproportionate share of Canada's job growth has been driven by the public sector and part time positions... especially during summer months, rather than high paying, private-sector career opportunities. In fact, the broader year-to-date numbers show that the Canadian economy has routinely struggled with heavy monthly net job losses. Despite these additions, Canada’s actual unemployment rate has consistently trended much higher than that of the U.S. 2⃣ "Highest level of foreign direct investment in 20 years" - While foreign money is arriving (largely driven by heavy government subsidies in green technology and EV plants), domestic business investment per worker has plummeted over the last decade. Economists point to the fact that while many foreign owners are buying Canadian businesses (not creating anything new and often laying off staff at these companies once ownership is transferred) domestic Canadian capital is fleeing to the U.S. and other markets because of Canada's complex regulatory hurdles and high cost of doing business. 3⃣ "We can see the Growth picking up this quarter" - Misleading. While there may be a minor quarter over quarter uptick due to specific, major project examples (like the Rio Tinto project mentioned), Canada is facing a systemic productivity crisis. While Canada’s overall GDP shows growth, its GDP per capita (economic output per person) has steadily declined. Canada actually sits near the bottom of the G7 in per-person wealth, meaning the average Canadian is technically experiencing an individual economic contraction despite the top-line national growth numbers Carney brags about. 4⃣ The carbon-neutral aluminum plant photo-op??? - announced in 2024, years before this speech. First production isn't until 2027. Capacity: 2,500 T a year. It relies on billions in taxpayer-funded subsidies and artificial price advantages through carbon taxes, rather than genuine market competitiveness, to survive. This initiative represents massive corporate welfare for a large multinational that fails to address broader, systemic declines in Canadian productivity and investment... and on its face, is not competitive in any beneficial way to the Canadian public at this time... or if the net zero climate hysteria eventually fades completely (which it already is in many nations) 5⃣ Mark Carney is painting a picture of an economy undergoing a booming structural transformation. The omitted reality is that the top-line numbers look healthy primarily because of aggressive population expansion and massive government capital injections into specific green sectors.

Jasmin Laine

41,027 views • 8 days ago