--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-24/new-estimates-of-real-income-and-multifactor-productivity-growth-for-the-canadian-business-sector-1961-2011/" title: "New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T07:33:48+00:00" date_modified: "2026-07-13T07:33:48+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2012" ipm_keyword: - "business sector" - "Canada" - "capital input" - "KLEMS" - "labour input" - "MFP" - "real income" - "Statistics Canada" - "terms of trade" - "top-down approach" ipm_research_theme: - "Productivity trends and comparisons" ipm_country_focus: - "Canada" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011 Canonical URL: https://csls.ca/ipm-archive/ipm-issue-24/new-estimates-of-real-income-and-multifactor-productivity-growth-for-the-canadian-business-sector-1961-2011/ # New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011 [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-24-2-Diewert-Yu.pdf) Cite this article × Cite this article as: Diewert, Erwin, and Emily Yu. 2012. “New Estimates of Real Income and Multifactor Productivity Growth for the Canadian Business Sector, 1961-2011.” International Productivity Monitor, No. 24 (Fall 2012): 27–48. https://www.csls.ca/ipm-archive/ipm-issue-24/new-estimates-of-real-income-and-multifactor-productivity-growth-for-the-canadian-business-sector-1961-2011/ ## Authors: - Erwin Diewert Department of Economics, University of British Columbia - Emily Yu Global Affairs Canada ## IPM Issue 24 Fall 2012 pp. 27–48 ## 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/) [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/) [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/) [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/) [Accounting for the Decline of Canada’s Real GDP Per Capita since Mid-2022 Philip Smith Spring 2024 | IPM Issue 46 | pp. 83–100](https://csls.ca/ipm-archive/ipm-issue-46/accounting-for-the-decline-of-canadas-real-gdp-per-capita-since-mid-2022/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn Using new data from Statistics Canada, this article shows that the multifactor productivity (MFP) performance of the Canadian business sector has been reasonably satisfactory over the past half century. In particular, traditional gross income MFP growth averaged 1.03 per cent per year over the 1961-2011 period. This compares with the official Statistics Canada estimate of 0.28 per cent. The difference was mostly due to significantly higher capital input growth recorded by Statistics Canada. The study finds that quality adjusted labour input growth was the main driver of real income growth, followed by MFP growth, capital input growth, and finally by falling real import prices. The study encountered many data problems which should be addressed in future work on Canadian business sector productivity performance. RÉSUMÉ Utilisant de nouvelles données de Statistique Canada, cet article montre que la performance de la productivité multifactorielle (PMF) des entreprises canadiennes a été raisonnablement satisfaisante au cours du dernier demi-siècle. En particulier, la croissance traditionnelle de la PMF selon les produits bruts a été en moyenne de 1,03 % par année de 1961 à 2011, alors que l’estimation officielle de Statistique Canada est de 0,28 %. Cette différence est due surtout à la croissance beaucoup plus forte des intrants de capital enregistrée par Statistique Canada. L’étude conclut que la croissance de l’apport de travail pondérée par la qualité est le principal facteur de la croissance du revenu réel, suivie par la croissance de la PTF, la croissance des intrants de capital et, enfin, la chute du prix réel des importations. De nombreux problèmes de données qu’il faudrait résoudre dans les prochains travaux sur la performance de la productivité du secteur des entreprises canadiennes se sont présentés au cours de cette étude. À l’aide de nouvelles données de Statistique Canada, cet article montre que la performance de productivité multifactorielle (PMF) du secteur des entreprises canadien a été raisonnablement satisfaisante au cours du dernier demi-siècle. En particulier, la croissance traditionnelle de la PMF du revenu brut a été en moyenne de 1,03 % par année sur la période 1961-2011, comparativement à l’estimation officielle de Statistique Canada de 0,28 %. La différence était principalement due à une croissance des intrants en capital nettement plus élevée enregistrée par Statistique Canada. L’étude constate que la croissance des intrants de main-d’œuvre ajustée en fonction de la qualité était le principal moteur de la croissance du revenu réel, suivie de la croissance de la PMF, de la croissance des intrants en capital et enfin de la baisse des prix réels des importations. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-24-2-Diewert-Yu.pdf)