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December 02, 2020CANADA BUSINESS SECTOR LABOUR PRODUCTIVITY, Q3 2020 
Labour productivity of Canadian businesses decreased 10.3% in Q3 2020, as hours worked rebounded faster than business output. Easing of COVID-19 restrictions led to a rebound in hours worked and business output, both of which saw record gains that produced the largest quarterly decrease on record for labour productivity. Statistics Canada noted that the productivity decline was in part explained by a recovery in hours worked that favoured smaller businesses with limited economies of scale.
There has been unprecedented volatility in labour productivity over the last three quarters, with increases of 4.9% in Q1 and 10.5% in Q2, followed by a 10.3% contraction in Q3. Compared to Q3 2019, labour productivity of Canadian businesses is up 4.0%.
In Q3 2020, real gross domestic product (GDP) of businesses increased 11.2%, following a record 14.2% drop in the second quarter. Output remains down 6.9% compared to Q3 2019. Total compensation per hour worked declined 11.6% in the third quarter.
Unit labour cost decreased 1.5% in Q3 2020 following an increase of 4.4% in the second quarter. This was the fastest decline in unit labour cost since Q1 2016.
Measured in US dollars, Canada's unit labour cost increased 2.5% in Q3 2020, following a 1.3% increase in Q2 2020. Unit labour cost in US dollars is up 3.5% compared to the same quarter in 2019.
Note: Labour productivity, GDP and unit labour costs cover the business sector only. Labour productivity is a measure of real GDP per hour worked. Unit labour cost is defined as the cost of workers' wages and benefits per unit of real GDP.
Statistics Canada. Table 36-10-0206-01 Indexes of business sector labour productivity, unit labour cost and related variables
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