--- canonical_url: "https://csls.ca/ipm-archive/issue-7/canadas-recent-productivity-record-and-capital-accumulation/" title: "Canada’s Recent Productivity Record and Capital Accumulation" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T05:43:05+00:00" date_modified: "2026-07-13T06:41:28+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2003" ipm_keyword: - "Canada" - "capital accumulation" - "capital intensity" - "industry-level" - "labour productivity" - "machinery and equipment" - "productivity gap" - "rental price of capital" - "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" --- # Canada’s Recent Productivity Record and Capital Accumulation Canonical URL: https://csls.ca/ipm-archive/issue-7/canadas-recent-productivity-record-and-capital-accumulation/ # Canada’s Recent Productivity Record and Capital Accumulation [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-7-2-Rao-Tang-Wang.pdf) Cite this article × Cite this article as: Rao, Someshwar, Jianmin Tang, and Weimin Wang. 2003. “Canada’s Recent Productivity Record and Capital Accumulation.” International Productivity Monitor, No. 7 (Fall 2003): 24–38. https://www.csls.ca/ipm-archive/issue-7/canadas-recent-productivity-record-and-capital-accumulation/ ## Authors: - Someshwar Rao Innovation, Science and Economic Development Canada - Jianmin Tang Innovation, Science and Economic Development Canada - Weimin Wang Micro-Economic Policy Analysis Branch, Innovation, Science and Economic Development Canada ## IPM Issue 7 Fall 2003 pp. 24–38 ## 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/) [Labour Productivity as a Measure of Technological Change Ulrich Kohli Fall 2025 | IPM Issue 49 | pp. 64–81](https://csls.ca/ipm-archive/ipm-issue-49/labour-productivity-as-a-measure-of-technological-change/) [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/) [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/) [IPM Issue 47 Editors’ Overview Andrew Sharpe, Bart van Ark Fall 2024 | IPM Issue 47 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-47/) [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/) [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 This article examines the contribution of capital accumulation to labour productivity growth in Canada and the widening of the Canada-U.S. productivity gap in the 1990s. Using industry-level data, it finds that the slowdown in capital intensity growth was pervasive across all Canadian industries and was a major drag on labour productivity growth in the second half of the 1990s. Multifactor productivity growth in the two countries’ business sectors was virtually identical at around 2 per cent per year in 1995-2000, meaning that the labour productivity gap was driven almost entirely by a widening capital intensity gap. The gap is partly explained by higher relative rental prices of capital in Canada due to dollar depreciation and low wage growth. Cet article examine la contribution de l’accumulation du capital à la croissance de la productivité du travail au Canada et l’élargissement de l’écart de productivité Canada-États-Unis dans les années 1990. À l’aide de données sectorielles, il constate que le ralentissement de la croissance de l’intensité du capital a été généralisé dans l’ensemble des industries canadiennes et a constitué un frein majeur à la croissance de la productivité du travail dans la seconde moitié des années 1990. La croissance de la productivité multifactorielle dans le secteur des entreprises des deux pays était pratiquement identique à environ 2 % par année en 1995-2000, ce qui signifie que l’écart de productivité du travail était presque entièrement attribuable à un élargissement de l’écart d’intensité du capital. Cet écart s’explique en partie par des prix de location du capital relativement plus élevés au Canada en raison de la dépréciation du dollar et de la faible croissance des salaires. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-7-2-Rao-Tang-Wang.pdf)