The Edmonton Journal
Saturday, August 25, 2001

Alberta productivity tops nation

Ontario rates second, with Saskatchewan close behind
By Jen Ross
The study confirmed Alberta as the country's economic engine, with average gross domestic product (GDP) per job of $66,000 in 1996-97, $10,000 higher than second-place Ontario, where the average worker output was $56,000.
"What we see is a kind of stasis, where relatively well-off provinces are doing OK, and where the have-not provinces still have a long way to go to come closer to the national average," said Finn Poschmann, senior policy analyst at the C.D. Howe Institute, a Toronto-based social and economic policy think-tank.
Alberta and Saskatchewan made a killing off oil and gas industries, while Ontario's advantage was largely due to the finance sector.

Alberta and Ontario are leading the pack as Canada's most productive provinces, a Statistics Canada report revealed Friday.

Canada has long been concerned with its productivity rate at a national level, often comparing its gains with those in the U.S. But the StatsCan study was the first thorough government comparison of levels of economic output by province.

The study confirmed Alberta as the country's economic engine, with average gross domestic product (GDP) per job of $66,000 in 1996-97, $10,000 higher than second-place Ontario, where the average worker output was $56,000.

Saskatchewan was right behind Ontario at $54,000, followed by Quebec, at $52,000 and British Columbia at $51,000. Manitoba and Atlantic Canada were at the bottom with $44,000 and $42,000, respectively. Their annual labour productivity was only two-thirds that of Alberta. The study did not calculate a national average.

"What we see is a kind of stasis, where relatively well-off provinces are doing OK, and where the have-not provinces still have a long way to go to come closer to the national average," said Finn Poschmann, senior policy analyst at the C.D. Howe Institute, a Toronto-based social and economic policy think-tank.

He said further studies are needed to determine how provincial productivity compares over the last 20 years. Statistics Canada hopes to have a comparative report by spring.

The current study is the first instalment in an initiative to produce more detailed accounts of economies across the provinces, said StatsCan's director of microeconomic analysis, John Baldwin.

It measured average labour productivity for 1996 and 1997, using a new database on provincial productivity based on 234 private-sector industries.

Baldwin pointed out that provincial GDP generated per job differed substantially across industries.

For example, Alberta and Saskatchewan made a killing off oil and gas industries, while Ontario's advantage was largely due to the finance sector. Secondary manufacturing netted the highest output for Quebec, while high-wage services, such as wholesale, storage, utilities, finance and pipelines, were the most productive industries for the Atlantic provinces.

Last year, the federal government announced a $700-million, five-year Atlantic Investment Partnership, which began investing this summer in innovation, community economic development, trade promotion, entrepreneurship and business skills development on the east coast.

The initiative was the brain-child of Industry Minister Brian Tobin, who was criticized last fall for his eastern prioritization.

But a spokeswoman for the minister, a former Newfoundland premier, says the StatsCan study confirms what he has said about investment in the Maritimes.

"The Atlantic provinces are seen as have-nots, but its really a question of access," said Jennifer Savoy. "This fund gives us a leg-up to get ourselves up there with the other provinces."

The StatsCan study was released a day after Prime Minister Jean Chretien urged Alberta not to let its prosperity cause economic dislocation in other provinces.

Andrew Sharpe, executive director of the Centre for the Study of Living Standards, confirmed provinces with higher productivity have higher incomes and overall living standards, making them more attractive for investors and for relocation.