The Impact of the Oil Boom on Canada's Labour Productivity Performance

Andrew Sharpe () and Bert Waslander

No 2014-05, CSLS Research Reports from Centre for the Study of Living Standards

Abstract: The objective of this report is to evaluate the impact of the oil and gas industry on labour productivity growth in Canada since 2000 through an exploration of the various channels, both direct and indirect, by which the oil and gas sector affects aggregate productivity. The report sheds light on the paradoxical lack of a direct negative contribution of the oil and gas sector to aggregate labour productivity growth despite the very large fall in productivity experienced by the sector. It highlights the divergent productivity growth paths for the oil and gas sectors in Alberta and Newfoundland and Labrador, which drove the aggregate productivity performance of these two provinces. The report also discusses how developments in the oil and gas industry, notably the increase in the price and production of petroleum, have affected productivity growth in other parts of the economy. It finds that the oil boom has had a substantial negative effect on the cost competitiveness of manufacturing by putting upward pressure on the value of the Canadian dollar – the so-called Dutch Disease. Counteracting this are positive effects associated with demand and incomes generated by the oil boom, as well as increases in spending on R&D and education by the major oil-producing provinces.

Keywords: Canada; Oil Boom; Oil; Natural Gas; Energy Sector; Labour Productivity; Dutch Disease; Alberta; Newfoundland; Labrador; Oil and Gas Industry; Productivity Growth; Productivity (search for similar items in EconPapers)
JEL-codes: J24 N72 O47 O51 (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-cse, nep-eff and nep-ene
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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