Canada's Transportation Sector Ranked Last Among G7 Economies in Productivity Growth
Transport Canada's annual report has painted a bleak picture of the country's transportation sector, ranking it last among Group of Seven economies for productivity growth over the past 25 years. The report found that the sector's productivity dropped sharply after 2017, despite the overall economy experiencing flat productivity.
The Bank of Canada forecasts that the sector's productivity will remain stagnant for at least another decade, even as officials promote overseas markets to make up for a shrinking US trade relationship. One major issue facing the sector is its lack of automated port capacity, currently, only 8% of global container terminal capacity has some level of automation.
Transport Canada's report also highlighted the significant regulatory burden on the transportation sector, with 55% of Canadian firms already having a diversification strategy in place and planning to expand further. However, they cited high logistics costs, unfamiliar regulations, and limited access to capital as major barriers to implementing these plans.