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Canadian skimping afflicts productivity

– Elizabeth Babcock says it takes almost three weeks to do a task her U.S. peers can finish in one day.

A project coordinator at a large international information company in Toronto, Babcock says she enters data by hand because she doesn’t have the automated documentation software used by her counterparts across the border.

“It’s hard enough to do your job when you don’t have the tools to do your work to the best of your abilities,” Babcock said, declining to name her employer out of concern about retribution. The difficulty is “made more clear when people are doing the same job as you in a different country who do have the technology.”

Canadians such as Babcock have fallen behind their U.S. peers in productivity in part because employers for years have spent less on worker training and equipment. Workers may end up paying the price if companies switch their focus to regaining competitiveness by spending on new equipment and slowing the pace of hiring.

“There will be this pressure to raise productivity,” said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto in an Aug. 20 telephone interview. This means there will still be “hiring, but maybe not as aggressively as in the past.”

Worker output per hour has stagnated. Canada’s labor productivity fell 0.9 percent in the first quarter from a year earlier, while the U.S. measure gained 1.2 percent, Statistics Canada said June 7. “We have priced ourselves out of the North American market,” said David Dodge, who has spent much of his career studying productivity as a former Bank of Canada governor and top finance department official. “We don’t seem to get the mileage out of our information and communication technology that the Americans do.”

Finance Minister Jim Flaherty has touted the country’s labor market, saying the country has recovered jobs lost in the global recession faster than any other Group of Seven country, including the United States. That advantage has been reduced, with employment growth slowing to an average of 6,000 a month so far this year from 25,900 last year, Statistics Canada figures show.

Canada’s unemployment rate was 7.2 percent in July, with the U.S. at 7.4 percent. Canadian workers had just half as much machinery and information and communications equipment as their American counterparts in 2010, Bank of Canada Senior Deputy Governor Tiff Macklem said in an October 2012 speech.

The Conference Board of Canada in 2011 found that spending for on-the-job training had dropped 40 percent since peaking in 1993.

There’s no shortage of theories about why Canadian investment and productivity have lagged, including complacency drawn from the country’s reliance on easy commodity riches.

Bosses with less training than their U.S. peers aren’t inclined to build their employees’ long-term skills and instead focus on short-term tasks such as using a particular tool, said Douglas Williamson, head of the Beacon Group consulting company.

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