As documented earlier the global socio-economy has experienced historic growth since the first half of the nineteenth century. Higher per capita incomes have enabled improvements of health and education infrastructure contributing to a more than doubling of global expected life times. Higher per capita income is driven by higher productivity. This post complements an earlier post and focuses on labour productivity of four sectors Canadian economy: the goods-producing business sector, the services-producing business sector, non-profit institutions serving households and the government sector. It documents the continuing growth of the economy and hopefully the extension of the golden age well into the future,

Canadian data is used for this post. As shown in Figure 1 all sectors grew through the first couple of decades of the new millennium, continuing the historic growth spurt. This period includes the global financial crisis of 2008 and the covid-19 pandemic of 2018. Nevertheless the resilience of the Canadian economy is a clear sign of the growth trend’s strength.

Three of the four sectors generated higher labour productivity the only exception was the goods-producing sector. Key elements of the goods-producing sector has certain challenges. First, global manufacturing was gravitating towards China and Canada’s share was declining because of the rise of China. Even Germany and the United States had declining shares.

Second, natural resource extraction industries are also a large component of Canada’s goods-producing sector. The problem is with the numerator, total value added, because ownership of Canada’s natural resources reside with the Crown and there is confusion by government administrators regarding pricing policy. The result is that value added that ought to assigned to Canada is often booked as private profits and distributed to corporate operations outside Canada but more of this in a future post.

Each of Canada’s 13 economies has a unique mix of sectors. Average annual labour productivity by economic sector for the provinces and territories is illustrated in the next four figures. They will be referenced in future postings but are offered here for review and familiarity.

Average annual labour productivity for the government sector remined steady for all jurisdictions. Government services are are generally not for-profit enterprises so labour costs makes up almost all of the associated value added. Benefits of government provided goods and services are health, education, national security and internal protection. Financial benefits of an educated and healthy labour force are captured by workers and businesses and accounted for as their income, not direct government income. In this context taxes are a responsibility of being a citizen not a financial payment for services provided,