The quality of Canada’s infrastructure has fallen behind its global counterparts so much that it’s hurting the economy’s productivity levels, according to former Bank of Canada Governor David Dodge.
Ahead of Finance Minister Bill Morneau’s fall fiscal update on Tuesday, Dodge said many will be watching the statement to find out how Ottawa plans to address Canada’s sluggish economy and its long-standing problems with low productivity.
“One of the things that is quite clear from all of the international comparisons, is that we have fallen behind in the quality of our infrastructure in terms of its ability to facilitate private investment and productivity gains,” Dodge, now senior advisor at law firm Bennett Jones, told BNN in an interview.
“The one thing we all would be looking forward to in this fall statement, and next spring’s budget, is a clear statement on where the [Finance Minister] wants to take investment in productivity-enhancing infrastructure.”
Dodge also said that the fall in productivity levels has been seen elsewhere around the world, including in the United States.
“This is not a uniquely Canadian problem. We’ve seen in the last five years a dramatic fall-off in activity in the U.S., which, until now was the absolute world leader not just in levels of productivity, but also productivity growth,” Dodge said.
“There’s no silver bullet, and it’s going to require a judicious combination of various types of structural policies to [improve productivity].”