Canada’s labour market surge and drop in unemployment over the past few months have driven up wages, which in turn could bring negative economic impacts like higher inflation, lower productivity, and increased cost of labour per unit of output, a prominent economist warns. In November 2021, as Canada’s labour market continued its return to something resembling pre-pandemic levels, employers came up against a shortage of qualified workers. This led many to raise wages in order to entice new hires. “Hiring workers at higher pay may seem positive for the economy, but can often translate into lower productivity, which raises unit labour costs,” Philip Cross, Munk senior fellow at the Macdonald-Laurier Institute, wrote in a recent commentary. “This reinforces the upward pressure on inflation while eroding our ability to compete with firms in the United States.” The economy added 154,000 jobs in November 2021, lowering the unemployment rate from 6.7 percent …