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March 04, 2022CANADA BUSINESS SECTOR LABOUR PRODUCTIVITY, Q4 AND ANNUAL 2021 
During Q4 2021, public health measures were similar to Q3 and among the least restrictive since the start of the pandemic. The emergence of the Omicron variant occurred towards the end of the quarter in mid December.
Labour productivity of Canadian businesses decreased at a seasonally adjusted annualized rate of 0.5% in Q4 2021 as hours worked grew 2.6% and real business output increased by 2.0%. Canada's labour productivity has mostly been falling in periods during which COVID restrictions were eased as a full range of industries return to normal capacity.
During the COVID-19 pandemic, there has been unprecedented volatility in labour productivity. Compared to Q4 2019, the last pre-pandemic quarter, business productivity is 1.2% lower, reflecting a 1.1% decline in real business output and an increase of 0.1% in hours worked.
Total compensation per hour decreased by 0.6% in the fourth quarter after increases the previous two quarters. Compared to Q4 2019, compensation per hour worked was 7.7% higher in Q4 2021.
Unit labour costs declined 0.1% in the fourth quarter as employee compensation declined slightly more than labour productivity. Unit labour costs were 9.0% higher than in Q4 2019.
Measured in US dollars, Canada’s unit labour cost fell 0.1% in Q4 2021 and were up 14.1% compared to Q4 2019.
ANNUAL 2021
Business sector labour productivity declined 6.9% in 2021 following on the increase of 8.1% in 2020. Labour productivity was 0.6% higher than 2019 levels. Output rose 4.8% and hours were up 12.1% in 2021.
Hourly compensation decreased 2.8% in 2021 following the 12.1% increase in 2020. Unit labour costs were up 4.5% in 2021 after a 3.7% increase in 2020. In US dollars unit labour costs increased 11.8% in 2021 with a 7.0% appreciation of the Canadian dollar in 2021. This was the largest annual growth since 2003 (+14.5%) when Canadian dollar appreciated more than 12%.
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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