Statscan reported that business productivity gained by a mediocre 0.1 per cent last year, the weakest showing since 1996. In the previous six years, labour productivity had gained by an average of 1.9 per cent per year.
Productivity growth has a direct bearing on standards of living.
"Productivity is an essential contributor to the prosperity of Canadians over the long run," Statscan said in the report. "It measures the efficiency with which labour is employed in the production process."
The weakness was wide spread, though manufacturing suffered the worst. Strong gains in the loonie throughout the year made Canadian goods much more expensive abroad, bruising both the export and manufacturing sectors.
In the manufacturing sector, 10 of 20 industries suffered declines in productivity. Five others saw growth in productivity slow from the year before.
Overall, manufacturing suffered a decline in productivity of 0.5 per cent. Working hours declined by 1.7 per cent.
"During this period, the rapid appreciation of the Canadian dollar pressured Canadian exporters of manufacturing goods to adjust their operating costs," Statscan said.
Eleven of 15 other industries outside the manufacturing sector reported declines in productivity or weaker growth.
The sectors that enjoyed stronger productivity growth were agriculture, forestry, fishing and hunting, professional services and arts, entertainment and recreation.
The strong Canadian economy stumbled in 2003 thanks to the outbreak of war in Iraq, the SARS outbreak in the Toronto area, Ontario's power outage in August, the discovery of mad cow disease in Alberta and raging summer forest fires in B.C.
The Canadian dollar, meanwhile, gained about 20 per cent over the course of the year against the weak U.S. greenback.
