Canada’s reliance on temporary workers reflects innovation gaps, experts say

Canada's lack of business investment has employers turning to temporary workers to boost their output. Here's why that's a drag on prosperity in Canada.

Canadian companies have lost a step when it comes to innovation, experts say, pointing toward Ottawa having work to do to turn around stagnating business investment and an over-reliance on temporary workers.

It’s a problem that will push down wealth and prosperity in Canada if left unsolved, according to economists and innovation experts who spoke to Global News.

Canada’s economic growth has been fairly flat in recent months, but that’s largely thanks to an influx of immigration and non-permanent residents providing a boost to output. Without temporary workers, Canada’s real gross domestic product wouldn’t be as strong as it is. On a per-person basis, it’s been declining.

A drop in per capita GDP should be worrying to Canadians and policymakers, says Ben Bergen, president of the Council of Canadian Innovators, a group made up of more than 150 tech CEOs.

It’s this measure that reflects the prosperity and wealth of a nation, not just on an individual basis, but on a wider scale that generates revenues for critical social spending like healthcare.

“GDP per capita is kind of how much money is in your jeans pocket,” Bergen says.

The slowdown in the Canadian economy has been engineered to a certain degree by the Bank of Canada as it raised its benchmark interest rate to cool spending demand and tame inflation. But the decline in per capita GDP also reflects a lack of innovation in the economy, experts like Bergen say, as businesses fail to invest to produce more with less.

Productivity, the measure of GDP output per hour worked, is currently on a six-quarter slide, according to Statistics Canada. Experts who spoke to Global News recently pointed to a lack of capital stock for workers as driving down productivity.