Analysis-Canada risks losing investment to Mexico as labor productivity skids

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Third teenager charged with second-degree murder | SaltWire #newsupdate #news #halifax #policeOTTAWA - Canada's low labor productivity level puts the country at risk of losing of billions of dollars of investments to Mexico, as the so-called nearshoring boom spurs companies to move supply chains to North America, economists and lobby groups say.

Economists say continued low labor productivity dampens profits as well as makes Canadian output expensive and uncompetitive globally. Mexico has seen foreign direct investment into the country hit a record $36 billion in 2023, a 27% jump from a year earlier, with more than half flowing into manufacturing, according to official data.

In the key autos sector, Mexico is already producing 1.5 times more vehicles than Canada and has already reached its pre-pandemic output level. Canada's vehicle production is languishing below 2019 levels and the sector finds it tough to compete with Mexico on labor costs due to a unionized workforce.

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Analysis-Canada risks losing investment to Mexico as labor productivity skidsCanada's low labor productivity level puts the country at risk of losing of billions of dollars of investments to Mexico, as the so-called nearshoring boom...
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