--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-45/the-post-2001-productivity-growth-divergence-between-canada-and-the-united-states/" title: "The Post-2001 Productivity Growth Divergence between Canada and the United States" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T08:14:58+00:00" date_modified: "2026-07-17T09:15:11+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2023" ipm_keyword: - "Canada" - "competition" - "industry-level" - "information cultural services" - "markup" - "post-2001" - "productivity divergence" - "Statistics Canada" - "telecommunications" - "United States" ipm_research_theme: - "Productivity trends and comparisons" ipm_country_focus: - "Canada" - "United States" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # The Post-2001 Productivity Growth Divergence between Canada and the United States Canonical URL: https://csls.ca/ipm-archive/ipm-issue-45/the-post-2001-productivity-growth-divergence-between-canada-and-the-united-states/ # The Post-2001 Productivity Growth Divergence between Canada and the United States [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-45-2-Gu-Willox.pdf) Cite this article × Cite this article as: Gu, Wulong, and Michael Willox. 2023. “The Post-2001 Productivity Growth Divergence between Canada and the United States.” International Productivity Monitor, No. 45 (Fall 2023): 28–60. https://csls.ca/ipm-archive/ipm-issue-45/the-post-2001-productivity-growth-divergence-between-canada-and-the-united-states/ ## Authors: - Wulong Gu Micro-Economic Analysis Division, Statistics Canada - Michael Willox Statistics Canada ## IPM Issue 45 Fall 2023 pp. 28–60 ## Related IPM articles [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? 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Bart van Ark, Klaas de Vries, Abdul Erumban Spring 2024 | IPM Issue 46 | pp. 38–59](https://csls.ca/ipm-archive/ipm-issue-46/are-intangibles-running-out-of-steam/) [Cracking the Productivity Code: An International Comparison of UK Productivity John Van Reenen, Xuyi Yang Spring 2024 | IPM Issue 46 | pp. 60–82](https://csls.ca/ipm-archive/ipm-issue-46/cracking-the-productivity-code-an-international-comparison-of-uk-productivity/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn The high degree of integration between the Canadian and the U.S. economies promotes sharing of technologies and innovation spillovers that are conducive to long-term productivity growth convergence. However, since 2001 labour productivity growth rates have diverged in sharp contrast to the previous four decades. A comparison of labour productivity growth decomposed into contributions by industry for both countries reveals that the information and cultural services industry has played an outsized role in the divergence, the start of which coincides with the dot-com recession of the early 2000s. Limits on foreign investment, most notably but not exclusively related to telecommunications, and strong output price growth relative to the United States are key factors for undertaking a simple counterfactual analysis to evaluate the role of competitive intensity in the information and cultural services industry. Estimates of markups and their impact on labour productivity growth suggest that limited competition has significantly reduced the productivity performance of that industry as well as the performances of others that are dependent on its services as intermediate inputs. Le niveau élevé d’intégration entre les économies canadienne et américaine favorise le partage des technologies et les retombées d’innovation propices à la convergence à long terme de la productivité. Cependant, depuis 2001, les taux de croissance de la productivité du travail ont divergé, en contraste marqué avec les quatre décennies précédentes. Une comparaison de la croissance de la productivité du travail décomposée en contributions sectorielles pour les deux pays révèle que l’industrie des services d’information et de la culture a joué un rôle démesuré dans cette divergence, dont le début coïncide avec la récession des entreprises point-com du début des années 2000. Les restrictions à l’investissement étranger, notamment mais pas exclusivement dans les télécommunications, et une forte croissance des prix de production par rapport aux États-Unis sont des facteurs clés. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-45-2-Gu-Willox.pdf)