Accounting for the Decline of Canada’s Real GDP Per Capita

The paper identifies six factors currently influencing real GDP per capita: (1) labour productivity; (2) average hours worked per job; (3) the employment rate of the working-age population; (4) the ratio of the working-age population to the permanent resident population (where working-age includes NPRs in that age class); (5) the share of permanent residents in the total population; and (6) the re. [...] study of the socio-economic characteris- The information in the Statistics Canada tics of the NPR population using data for study implies the overall impact of NPRs 2020 drawn from the 2021 Census of Pop- on GDP per capita is quite different from ulation (Tuey and Bastien 2023). [...] This ratio can be expressed as deflated value of inputs - because there is a product of other ratios that are thought no measure of the market value of outputs to be important in explaining changes in - divided by the number of hours worked in GDP per capita, with the proviso that the the sector. [...] working-age population.9 This driver is The next factor influencing GDP per similar to the previous factor, but rather capita is the ratio of the permanent resi- than focusing on the amount of work done dent population (citizens and immigrants) in the average job it focuses on the number to the total population. [...] Since the denominator of the ployment rate and the total-economy-to- labour productivity ratio does not distin- business-sector GDP ratio are continuing guish how skilled and experienced the em- to make positive contributions, but the ployed people are, on average, measured falling PR share of the population (equiv- productivity increases simply by having a alently the rising share of the NPR pop-.