The Bank of Canada issued a stark warning about the country's weak labour productivity and low levels of business investment on Tuesday, saying the situation is an emergency that makes it harder to control inflation and which could erode living standards if left unaddressed.

In an unusually blunt speech in Halifax, senior deputy governor Carolyn Rogers said that Canada is slipping further behind the United States and other peer countries when it comes to economic output per hour worked.

She pointed to weak business investment, meagre competition and a failure to properly integrate skilled immigrants into the Canadian work force.

Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, at a press conference in Ottawa on March 6.

Sean Kilpatrick/The Canadian Press