Raising Canadian Living Standards:

Canada’s living standards have been falling relative to those in the United States in recent years. The Chairman and CEO of the TD Bank Financial Group, Charles Baillie (2001) has suggested that Canadians adopt as a societal goal not only the reversal of this downward trend, but that Canadian living standards exceed US living standards within 15 years. Policies that the public and private sectors might adopt to attain this very ambitious objective were the focus at the multi-stakeholder roundtable organized for October 7-8, 2002. The objective of this background paper is to provide a framework for discussion of the issue of raising Canadian living standards. The paper first discusses definitions of living standards and related concepts. It then examines trends of living standards historically in Canada and the United States and in OECD countries. The third section looks at the relative importance of the determinants of living standards – productivity, working time, demographic structures, labour force participation, and the unemployment rate – in the growth of living standards in Canada and in accounting for the income gap with the United States and other countries. The fourth section discusses what strategie