Future productivity trends and Canada's economic potential Increases in productivity do not just happen. We need to work hard to achieve them. Productivity comes from the interaction of business investment in new capital equipment, a skilled labour force, and the adoption of new technology. It takes entrepreneurship and innovation to pull it all together. Typically, this interaction works best when businesses operate in a stable, low-inflation economic environment and when markets are competitive.
Producers are then under pressure to perform in terms of price, quality, and service.
With low inflation, a balanced fiscal position, and low interest rates, the economic policy environment is better now than it has been for over 25 years. This should provide the underpinnings for solid economic growth and increased savings and investment in the future. As well, more and more businesses, led by high-tech enterprises, are reported to have introduced new production technologies. Progress has also been made in learning new skills, removing labour market rigidities, and improving the adaptability, flexibility, and efficiency of our labour force. But more undoubtedly needs to be done in this area.