--- canonical_url: "https://csls.ca/research/can-a-lack-of-pro-productivity-policies-explain-the-secular-decline-in-canadas-productivity-growth/" title: "Can a Lack of Pro-Productivity Policies Explain the Secular Decline in Canada’s Productivity Growth?" author: name: "shomp" url: "https://csls.ca/author/shomp/" date_published: "2025-11-01T10:00:00+00:00" date_modified: "2026-07-16T15:35:29+00:00" post_type: "research" summary: "Canada's long-run productivity slowdown reflects structural challenges in innovation, technology adoption, and investment, not simply a lack of pro-productivity policies." post_tag: - "business investment" - "Canada" - "pro-productivity" - "productivity policy" - "secular decline" - "technological progress" country_focus: - "Canada" province_region: - "National" research_category: - "Productivity" research_theme: - "Fiscal Policy" - "Productivity and Economic Measurement" featured_image: "https://csls.ca/wp-content/uploads/2025/11/CSLS-Research-Report-2025-04-Cover-Image.webp" status: "publish" --- # Can a Lack of Pro-Productivity Policies Explain the Secular Decline in Canada’s Productivity Growth? Canonical URL: https://csls.ca/research/can-a-lack-of-pro-productivity-policies-explain-the-secular-decline-in-canadas-productivity-growth/ # Can a Lack of Pro-Productivity Policies Explain the Secular Decline in Canada’s Productivity Growth? [Download full PDF report](https://csls.ca/pdf/csls2025-04.pdf) Cite this report × Cite this report as: Sharpe, Andrew, and Stephen Tapp. 2025. “Can a Lack of Pro-Productivity Policies Explain the Secular Decline in Canada’s Productivity Growth?” CSLS Research Report 2025-04. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/can-a-lack-of-pro-productivity-policies-explain-the-secular-decline-in-canadas-productivity-growth/ ## Authors: - Andrew Sharpe Centre for the Study of Living Standards (CSLS) - Stephen Tapp Centre for the Study of Living Standards (CSLS) ## Report 2025-04 November 2025 45 pages ## Related research [Measuring the Appropriate Outcomes for Better Decision-Making: A Framework to Guide the Analysis of Health Policy Matthew Calver March 2016 | Report 2016-03 | 132 pages](https://csls.ca/research/measuring-the-appropriate-outcomes-for-better-decision-making-a-framework-to-guide-the-analysis-of-health-policy-2016-03/) [Living Standards Domain of the Canadian Index of Wellbeing Andrew Sharpe, Christopher Ross November 2011 | Report 2011-17 | 124 pages](https://csls.ca/research/living-standards-domain-of-the-canadian-index-of-wellbeing-2011-17/) [Productivity: Key to Economic Success Centre for the Study of Living Standards (CSLS) March 1998 | Report 1998-01 | 99 pages](https://csls.ca/research/productivity-key-to-economic-success/) [Apprenticeship in Canada: A Training System Under Siege? 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This paper asks whether weak public policy explains that decline and whether new pro-productivity policies could reverse it. Using long-run data and the policy typology of Van Ark et al. (2023), we examine Canada’s record on factor accumulation, technological and structural change, market functioning and resource allocation, and international integration. Our analysis suggests that successive Canadian governments have generally pursued relatively market-oriented, pro productivity reforms — such as liberalizing trade, delivering a stable, predictable inflation environment, modernizing and cutting taxes, and investing in human capital — yet productivity growth continued to falter. The main drivers appear to be declining technological progress and inadequate business investment, not an absence of policy effort. We conclude that, while new policy reforms are desirable and worthwhile (such as easing interprovincial barriers and sharpening competition), they are unlikely to deliver a major revival of Canada’s long-term productivity growth. Au cours du dernier demi-siècle, la croissance de la productivité du travail au Canada a ralenti de façon spectaculaire, passant de 3,7 % par année en 1947-1973 à moins de 1 % depuis 2000. Cet article se demande si la faiblesse des politiques publiques explique ce déclin et si de nouvelles politiques favorables à la productivité pourraient l’inverser. À l’aide de données de longue période et de la typologie des politiques de Van Ark et coll. (2023), nous examinons le bilan du Canada en matière d’accumulation de facteurs, de changement technologique et structurel, de fonctionnement des marchés et d’allocation des ressources, ainsi que d’intégration internationale. Notre analyse indique que les gouvernements canadiens successifs ont généralement mis en œuvre des réformes relativement axées sur le marché et favorables à la productivité — telles que la libéralisation des échanges, le maintien d’un environnement inflationniste stable et prévisible, la modernisation et la réduction des impôts, ainsi que l’investissement dans le capital humain — sans pour autant freiner le ralentissement de la croissance de la productivité. Les principaux facteurs en cause semblent être le ralentissement du progrès technologique et l’insuffisance de l’investissement des entreprises, plutôt qu’une absence d’effort politique. Nous concluons que, bien que de nouvelles réformes politiques soient souhaitables et utiles (comme l’allègement des barrières interprovinciales et le renforcement de la concurrence), elles sont peu susceptibles de provoquer une relance majeure de la croissance de la productivité à long terme au Canada. [Download full PDF report](https://csls.ca/pdf/csls2025-04.pdf)