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The Lion 6 electric truck, is assembled at the Lion Electric Company assembly plant in Saint-Jerome, Que., on Aug. 21.Christinne Muschi/The Canadian Press

In 2006, former Quebec Premier Lucien Bouchard sparked outrage when he said the province was economically behind its neighbours because people “don’t work enough.” To match the economic output of Ontario, and the even higher level of the United States, he said, “we have to work harder.”

He was partly right. But he was mostly wrong.

There are two ways for a place with a lower level of economic output to catch up to a place with a higher level – a situation that describes Canada versus the United States. The country that is behind can work more. Or it can work smarter.

According to estimates from the New York City-based Conference Board, workers in several Western European countries produce more goods and services – more gross domestic product – for each hour of labour than U.S. workers. Norwegians produce 19 per cent more GDP per hour. Danes produce 13 per cent more, Swedes 4 per cent more, and Austrians 3 per cent more. German per-hour output is on par with the U.S., while French output per hour is 95 per cent of the American level.

Canada’s output for each hour of work is just 79 per cent of the U.S. level. We’re behind Italy.

It is one of the great mysteries of the Canadian economy. Given our exceptionally close business ties with the U.S., including more than three decades of free trade, it’s surprising we haven’t closed the gap. Among the most likely explanations is that Canadian businesses invest less in research and development, new equipment and new technologies – all things that boost output per worker. The Canadian market is also less competitive than in the U.S. or the European Union. This puts less pressure on businesses to invest in raising output per worker.

But Canada has somewhat reduced the output gap with the U.S., and closed most of the gap with Western Europe. How? By working more.

According to the Conference Board, the average European labours hundreds of hours less each year than the average Canadian. They produce more for each hour of work; we catch up by working longer hours.

And compared to Americans, more Canadians are working. In July, 65.6 per cent of Canadians aged 15 or older were in the labour force; the U.S. figure was three percentage points lower. The share of Canadian workers in their prime years – aged 25 to 54 – is five points higher than in the U.S. In Germany, it’s six points higher. In Sweden, it’s more than 11 points higher.

When you multiply output per hour times the number of workers and hours worked, the Conference Board estimates that Canada’s GDP per person is 77 per cent of the U.S. level.

France, with higher output per hour than Canada, but far fewer working hours, is at 71 per cent of the U.S. level. Australia, with a labour force similar to Canada’s, but higher productivity, is at 83 per cent.

Germany, with the same per-hour productivity as the U.S., but workers labouring hundreds of hours less, also has a GDP per capita that is 83 per cent of the U.S. level. That pattern – high per-hour output and relatively low hours, yielding a GDP per capita lower than the U.S. – is the pattern across most of Europe.

Canada, in contrast, has low productivity combined with high hours.

All of these numbers come with important caveats.

The economic pie is never divided equally by the number of residents in a country, especially not the U.S. It has the developed world’s most unequal income distribution. GDP per capita tells us how much pie there is, not the size of each person’s slice.

What’s more, all these figures are estimates, adjusted for cross-border comparisons. And GDP is adjusted for purchasing power parity – an estimate of the buying power of a local currency relative to the U.S. dollar. There’s a margin of error, and room for debate, in all these data.

But the broad strokes of the picture are clear.

Consider the comparison between Canada and Finland.

The GDP per capita of both countries is 77 per cent of the U.S. level, according to the Conference Board. However, Finnish output per hour is 91 per cent of the U.S. level – 12 points higher than Canada’s. What have the Finns “bought” with that extra productivity? The opportunity to work less. Almost 200 hours per worker less.

Or to put it another way, to keep Canada’s economy level with Finland, the average Canadian is working 200 more hours. We’re working harder. They’re working smarter.

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