--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-20/sensitivity-of-capital-stock-and-multifactor-productivity-estimates-to-depreciation-assumptions-a-canada-u-s-comparison/" title: "Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T07:31:43+00:00" date_modified: "2026-07-13T07:31:43+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2010" ipm_keyword: - "Canada" - "capital intensity" - "capital stock" - "depreciation" - "ICT" - "MFP" - "productivity gap" - "structures" - "United States" ipm_research_theme: - "Measurement and methodology" ipm_country_focus: - "Canada" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison Canonical URL: https://csls.ca/ipm-archive/ipm-issue-20/sensitivity-of-capital-stock-and-multifactor-productivity-estimates-to-depreciation-assumptions-a-canada-u-s-comparison/ # Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-20-2-Tang-Rao-Li.pdf) Cite this article × Cite this article as: Tang, Jianmin, Someshwar Rao, and Min Li. 2010. “Sensitivity of Capital Stock and Multifactor Productivity Estimates to Depreciation Assumptions: A Canada-U.S. Comparison.” International Productivity Monitor, No. 20 (Fall 2010): 22–47. https://www.csls.ca/ipm-archive/ipm-issue-20/sensitivity-of-capital-stock-and-multifactor-productivity-estimates-to-depreciation-assumptions-a-canada-u-s-comparison/ ## Authors: - Jianmin Tang Innovation, Science and Economic Development Canada - Someshwar Rao Innovation, Science and Economic Development Canada - Min Li Innovation, Science and Economic Development Canada; Statistics Canada ## IPM Issue 20 Fall 2010 pp. 22–47 ## Related IPM articles [Efficiency Adjustment of Hours Worked: Two Possible Modifications of a Jorgensen Production Model Barbara Fraumeni Fall 2025 | IPM Issue 49 | pp. 103–115](https://csls.ca/ipm-archive/ipm-issue-49/efficiency-adjustment-of-hours-worked-two-possible-modifications-of-a-jorgensen-production-model/) [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [De-industrialization and the Great Productivity Slowdown: What Comes Next? Paul Fisher Spring 2025 | IPM Issue 48 | pp. 115–138](https://csls.ca/ipm-archive/ipm-issue-48/de-industrialization-and-the-great-productivity-slowdown-what-comes-next/) [Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Carl Obst Fall 2024 | IPM Issue 47 | pp. 87–108](https://csls.ca/ipm-archive/ipm-issue-47/using-ecosystem-accounting-to-integrate-the-environment-in-measures-of-multifactor-productivity/) [Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Christina Caron Fall 2024 | IPM Issue 47 | pp. 109–147](https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/) [Climate Change and Productivity — An Exploration Dirk Pilat Fall 2024 | IPM Issue 47 | pp. 54–86](https://csls.ca/ipm-archive/ipm-issue-47/climate-change-and-productivity-an-exploration/) [How Does Industrial Policy Impact Output, Hours and Productivity? The Canadian Experience Tim Sargent Fall 2024 | IPM Issue 47 | pp. 39–53](https://csls.ca/ipm-archive/ipm-issue-47/how-does-industrial-policy-impact-output-hours-and-productivity-the-canadian-experience/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn This article provides consistent estimates for capital stock and multifactor productivity (MFP) for Canada and the United States across major industries for the 1987-2007 period. For this purpose, capital stock estimates are developed for Canadian and U.S. industries using the same asset depreciation rates (either from the U.S. Bureau of Economic Analysis or from Statistics Canada) for the two countries. The results show that on an hours worked basis Canadian industries invest more in total capital than their U.S. counterparts. This situation reflects much greater investment in structures, with less in machinery and equipment (including information and communications technologies). The results imply that all of the Canada-U.S. labour productivity gap arises from the multifactor productivity gap. RÉSUMÉ Cet article a pour objectif de présenter des estimations convergentes pour le Canada et les États-Unis pour le stock de capital et de la productivité multifactorielle (PMF) dans l’ensemble des grandes branches d’activité pour la période de 1987-2007. À cette fin, nous avons élaboré des estimations du stock de capital pour les branches d’activité canadiennes et américaines en utilisant les mêmes taux d’amortissement de l’actif (ceux du U.S. Bureau of Economic Analysis et de Statistique Canada, selon le cas) pour les deux pays. Les résultats montrent que les entreprises canadiennes investissent davantage par heure travaillée dans le capital total que leurs contreparties américaines. Cette situation reflète plus de capital dans les strucures et moins dans les machines et matériel (y compris les technologies de l’ínformation et des communications). Les résultants impliquent que tout l’écart Canada-EU dans le niveau de la productivité du travail vient de l’écart dans le niveau de la productivité multifactorielle. 1 Cet article fournit des estimations cohérentes du stock de capital et de la productivité multifactorielle (PMF) pour le Canada et les États-Unis dans les grandes industries pour la période 1987-2007. À cette fin, des estimations du stock de capital sont élaborées pour les industries canadiennes et américaines en utilisant les mêmes taux d’amortissement des actifs (soit du Bureau of Economic Analysis américain, soit de Statistique Canada) pour les deux pays. Les résultats montrent que sur la base des heures travaillées, les industries canadiennes investissent davantage en capital total que leurs homologues américaines. Cette situation reflète un investissement beaucoup plus important dans les structures, avec moins d’investissement en machines et matériel (y compris les technologies de l’information et des communications). Les résultats impliquent que la totalité de l’écart de productivité du travail Canada-États-Unis provient de l’écart de productivité multifactorielle. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-20-2-Tang-Rao-Li.pdf)