Measuring the Canada-U.S. Productivity Gap: Industry Dimensions

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Abstract

This article presents benchmark estimates of the Canada-U.S. labour productivity and total factor productivity gap for 29 industries for 1999, extended to cover 1997-2001. In 2001, output per hour in the Canadian business sector was 82 per cent of the U.S. level, with TFP at 87 per cent. Lower capital intensity accounted for about 30 per cent of the labour productivity gap. Three of four major sectors had productivity below U.S. levels — manufacturing (80 per cent), services (81 per cent), and primary industries (87 per cent) — while construction exceeded U.S. levels (129 per cent). The largest within-manufacturing gaps were in electronic and electrical products, fabricated metal, and machinery and computers.

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