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Alberta Productivity

“It’s really tough to be less productive (than other companies) when times get tough,” according to Jim Rakiewich. “You and your competitors are both scrambling for sales, but prices become compressed. So the companies that aren’t really productive and have too much cost built into their products – they really get killed.” The president and CEO of Edmonton-based McCoy Corporation, Rakiewich was discussing Alberta’s productivity growth – or, more to the point, the lack thereof.

In economics, the definition of “productivity” is bloodless. It is a ratio comparing what is produced to what is required to produce it – usually an average expressing the total output of some category of goods divided by the total input of, say, labour or raw materials. Bloodless the definition may be, but the reality of Alberta’s productivity ranking is downright bloody: Dead last in labour productivity growth among Canadian provinces during the period 1997-2005. Growth was 1 per cent a year – below the national average of 1.4%, and well below growth rates for U.S. and European countries.

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