Investing in our talent
I’ve talked a lot about businesses today, but it’s important to note that improving our productivity also relies on people. More specifically, it relies on human capital—the knowledge and skills of workers. And that’s the third lever we need to pull. Indeed, we need to invest in the workers of today—and of the future—so they can do their jobs effectively, reach their full potential and advance in their careers. That’s because, as I said earlier, a more productive society isn’t one that demands its citizens work more. It’s really one that gives people the knowledge, skills and tools they need to generate more value in their work.
Consider artificial intelligence (AI), for example. It’s a technology so transformative that it could dramatically increase our productivity. But it could also disrupt the labour market. To get the most out of AI while limiting the negative impact on workers, we will need to rethink some aspects of our approach to education, and we will need to invest in training.
Investing in talent also means making it easier to recognize professional accreditations across provinces and territories, and the foreign credentials of people who move to Canada. Doing so would help attract the best students and workers from around the world.
The Bank’s role
In listening to me today, you might be asking yourself why a Deputy Governor of the Bank of Canada decided to devote an entire speech to productivity. After all, the Bank has little direct influence over productivity, and the levers I just identified are outside of our purview. Ultimately, monetary policy cannot address weak productivity. Nor can it neutralize the economic effects of structural forces such as demographic change, trade reconfiguration or geopolitical uncertainty. But the Bank can play a role in encouraging a national dialogue. And in fostering macroeconomic conditions that are favourable to a collective effort to boost productivity in Canada.
Keeping inflation close to 2 % is more than just a number. This mandate brings real benefits to all Canadians. For households, low inflation maintains their purchasing power. For businesses, it provides a degree of stability and predictability about costs and prices in the economy. That allows them to focus their efforts on improving their productivity and competitiveness, whether by adopting new technologies, improving their processes or training their workers. This is how—in the context of uncertainty—the Bank can create conditions that help businesses and governments design and deliver effective solutions to improve Canada’s long-term prospects.
The Bank can also play an important role in public debate about how Canada can break free from the vicious circle of weak productivity. Through speeches, such as this one today, we hope to raise awareness among Canadians about the need to address this significant challenge. And through their research and analysis, many economists at the Bank are working to develop and share knowledge about productivity. Faced with such a complex challenge, we still have a lot to learn. So we will need to be both curious and humble.
