A Detailed Analysis of the Productivity Performance of Mining in Canada

Andrew Sharpe and Celeste Bradley ()

No 2009-07, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: In recent years, the productivity performance of mining in Canada has been very poor. Based on official real GDP and labour input estimates from Statistics Canada, labour productivity in mining fell by 2.21 per cent per year between the 2000 cyclical peak and 2007, with capital productivity down 0.28 per cent per year and total factor productivity (TFP) off 1.07 per cent per year between 2000 and 2006. Among the various hypotheses put forward to explain these trends, the most robust seems to be that higher output prices have suppressed productivity growth through two effects: increased exploitation of low-productivity marginal resource deposits, and business decisions based on profitability rather than productivity. Despite the decline in productivity in mining, it is not necessarily true that Canadians are worse off. In fact, increased relative output prices for mining products as well as a high productivity level in the mining sub-sector, have resulted in positive contributions to Canada‟s aggregate labour productivity growth from 2000 to 2006 and an offsetting effect on the post-2000 aggregate labour productivity slowdown.

Keywords: productivity; mining; labour productivity; output per hour; capital intensity; total factor productivity; Canada; resource extraction (search for similar items in EconPapers)
JEL-codes: D24 E23 J00 J08 O13 O30 O51 Q30 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (13)

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