Business productivity declined rapidly in Canada in 2022

Except for Manitoba and Saskatchewan, every province had a fall in corporate productivity in 2022. The productivity decline was, however, much less severe for most areas than in 2021. Only Nunavut’s output fell in the territories.

The COVID-19 pandemic-related historic reduction (-5.8%) in 2021 and the record increase (+8.6%) in 2020 resulted in a 1.5% decline in national productivity.

In nine provinces and territories, corporate productivity in 2022 was higher overall than before the pandemic in 2019.

Due to a loss in oil and gas extraction in 2022 as well as in 2021, primarily due to decrease in offshore production, Newfoundland and Labrador (-8.8% in 2022) experienced the most significant decline in productivity of all the provinces. On the other hand, after sharp decreases in 2021, only the areas of Manitoba (+2.1%) and Saskatchewan (+1.5%) experienced a productivity increase in 2022.

After being severely affected by a drought the previous year, the return to productivity growth in these two provinces in 2022 was primarily the result of both areas experiencing considerably better crop production circumstances.

All provinces and territories saw a gain in gross domestic product (GDP) in the business sector in 2022, except Newfoundland and Labrador, when it fell by 2.8%. In the meantime, all provinces had an increase in number of hours that were worked in the business sector, albeit at much slower rate than in 2021 for all but Saskatchewan.

Only Nunavut (+4.2%) had an increase in hours worked in the territories.

Nationally, the increased hours worked reduced to 5.4% in 2022 after a significant uptick (+11.5%) the year before.

All provinces and territories had an increase in the average pay per hour worked in the business sector in 2022, with growth rates ranging from 2.9% in Alberta to 9.3% in Yukon. Overall, growth was more substantial than in 2021 in all provinces and territories. Nationally, hourly pay climbed by 5.0% in 2022 after barely declining by 0.8% the year before.

For full-time paid employees in the entire economy in 2022, the actual wage rate—wages and salaries per hour worked—varied between the provinces and territories. On average, Prince Edward Island paid $30.61 per hour, while the Northwest Territories paid $54.83 per hour. In 2022, the average hourly pay for the country’s economy was $39.66.

The contractual pay rate, or the amount paid in wages and salaries per hour, is less than the actual wage rate.

This is because hours worked and hours paid differ due to paid leave and unpaid overtime for compensated employees.

The wage discrepancy between the contractual and actual rates continued in 2022. The Northwest Territories and Prince Edward Island had the most significant and lowest gaps, respectively, while Nunavut had the highest and New Brunswick had the lowest.

In general, when workers are moved between economic regions, there is either a positive net flow (i.e., a net inflow of workers) or a negative net flow (i.e., a net outflow of workers) depending on whether the region obtains more workers from the other areas than it can supply.

The primary net providers or recipients of paid labour (10,000 or more people) in 2022, as in 2021, were primarily located in eight financial districts in southern Quebec, five in southern Ontario, the Wood Buffalo-Cold Lake region in Alberta, and the Winnipeg region in Manitoba.

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