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A Detailed Analysis of the Productivity Performance of Mining in Canada

Author

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  • Andrew Sharpe
  • Celeste Bradley

Abstract

In recent years, the productivity performance of mining in Canada has been very poor. Based on official real GDP and labour input estimates from Statistics Canada, labour productivity in mining fell by 2.21 per cent per year between the 2000 cyclical peak and 2007, with capital productivity down 0.28 per cent per year and total factor productivity (TFP) off 1.07 per cent per year between 2000 and 2006. Among the various hypotheses put forward to explain these trends, the most robust seems to be that higher output prices have suppressed productivity growth through two effects: increased exploitation of low-productivity marginal resource deposits, and business decisions based on profitability rather than productivity. Despite the decline in productivity in mining, it is not necessarily true that Canadians are worse off. In fact, increased relative output prices for mining products as well as a high productivity level in the mining sub-sector, have resulted in positive contributions to Canada‟s aggregate labour productivity growth from 2000 to 2006 and an offsetting effect on the post-2000 aggregate labour productivity slowdown.

Suggested Citation

  • Andrew Sharpe & Celeste Bradley, 2009. "A Detailed Analysis of the Productivity Performance of Mining in Canada," CSLS Research Reports 2009-07, Centre for the Study of Living Standards.
    • Handle: RePEc:sls:resrep:0907
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    File URL: http://www.csls.ca/reports/csls2009-7.pdf
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    Citations

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    Cited by:

    1. Calzada Olvera, Beatriz & Iizuka, Michiko, 2020. "How does innovation take place in the mining industry? : Understanding the logic behind innovation in a changing context," MERIT Working Papers 2020-019, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Alexander Murray, 2016. "Partial versus Total Factor Productivity: Assessing Resource Use in Natural Resource Industries in Canada," CSLS Research Reports 2016-20, Centre for the Study of Living Standards.
    3. Andrew Sharpe & Blair Long, 2012. "Innovation in Canadian Natural Resource Industries: A Systems-Based Analysis of Performance, Policy and Emerging Challenges," CSLS Research Reports 2012-06, Centre for the Study of Living Standards.
    4. Tilton, John E., 2013. "The terms of trade debate and the policy implications for primary product producers," Resources Policy, Elsevier, vol. 38(2), pages 196-203.
    5. Manoj Kumar Mohanty & Padma Charan Mishra & Alaka Samantaray, 2023. "The Relationship of Critical Success Factors of the Mineral Industry: A Study on India," Vision, , vol. 27(1), pages 119-134, February.
    6. John E. Tilton, 2013. "Cyclical and Secular Determinants of Productivity in the Copper, Aluminum, Iron Ore, and Coal Industries," Working Papers 2013-11, Colorado School of Mines, Division of Economics and Business.
    7. Jean-Francois Arsenault & Andrew Sharpe, 2008. "An Analysis of the Causes of Weak Labour Productivity Growth in Canada since 2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 16, pages 14-39, Spring.
    8. Hamit Aydin, 2020. "Fifty years of copper mining: the US labor productivity," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 33(1), pages 11-19, July.
    9. Song, Yi & Zhang, Zhouyi & Zhang, Yijun & Cheng, Jinhua, 2022. "Technological innovation and supply of critical metals: A perspective of industrial chains," Resources Policy, Elsevier, vol. 79(C).
    10. Villena, Marcelo & Greve, Fernando, 2018. "On resource depletion and productivity: The case of the Chilean copper industry," Resources Policy, Elsevier, vol. 59(C), pages 553-562.
    11. Sam Mitra, 2019. "Depletion, technology, and productivity growth in the metallic minerals industry," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 32(1), pages 19-37, April.
    12. Lin Zhou & Jianglong Li & Yangqing Dan & Chunping Xie & Houyin Long & Hongxun Liu, 2019. "Entering and Exiting: Productivity Evolution of Energy Supply in China," Sustainability, MDPI, vol. 11(4), pages 1-19, February.

    More about this item

    Keywords

    productivity; mining; labour productivity; output per hour; capital intensity; total factor productivity; Canada; resource extraction;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O51 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
    • J00 - Labor and Demographic Economics - - General - - - General
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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