--- canonical_url: "https://csls.ca/research/productivity-growth-in-service-industries-a-canadian-success-story/" title: "Productivity Growth in Service Industries: A Canadian Success Story" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-02T14:07:31+00:00" date_modified: "2026-07-02T14:07:31+00:00" post_type: "research" summary: "" post_tag: - "Canada" - "Canada-US comparison" - "capital intensity" - "human capital" - "labour productivity" - "multifactor productivity" - "service sector" country_focus: - "Canada" province_region: - "National" research_theme: - "Productivity and Economic Measurement" - "Sector/Industry Analysis" featured_image: "https://csls.ca/wp-content/uploads/2026/07/old-reports_hero_banner_bg.webp" status: "publish" --- # Productivity Growth in Service Industries: A Canadian Success Story Canonical URL: https://csls.ca/research/productivity-growth-in-service-industries-a-canadian-success-story/ # Productivity Growth in Service Industries: A Canadian Success Story [Download full PDF report](https://csls.ca/pdf/csls2004-01.pdf) Cite this report × Cite this report as: Rao, Someshwar, Andrew Sharpe, and Jianmin Tang. 2004. “Productivity Growth in Service Industries: A Canadian Success Story.” CSLS Research Report 2004-01. Ottawa: Centre for the Study of Living Standards. https://csls.ca/research/productivity-growth-in-service-industries-a-canadian-success-story/ ## Authors: - Someshwar Rao Innovation, Science and Economic Development Canada - Andrew Sharpe Centre for the Study of Living Standards (CSLS) - Jianmin Tang Innovation, Science and Economic Development Canada ## Report 2004-01 February 2004 58 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/) [Productivity Trends: A Canada-U.S. Comparison Centre for the Study of Living Standards (CSLS) January 1999 | Report 1999-01 | 6 pages](https://csls.ca/research/productivity-trends-a-canada-u-s-comparison/) [New Estimates of Manufacturing Productivity Growth for Canada and the United States Andrew Sharpe March 1999 | Report 1999-02 | 21 pages](https://csls.ca/research/new-estimates-of-manufacturing-productivity-growth-for-canada-and-the-united-states/) [Apprenticeship in Canada: A Training System Under Siege? 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Service sector labour productivity growth has also shown a marked acceleration in both Canada and the United States in recent years relative to earlier periods. The objective of this paper is to identify the factors behind this relative Canadian success story. The sources of the acceleration in service sector labour productivity growth were different in the two countries. In Canada, increased multifactor productivity growth was responsible for 70 per cent of the labour productivity growth acceleration. In the United States, on the other hand, increased capital intensity and intermediate input intensity were the most important contributors to the service sector labour productivity growth acceleration. In Canada, the contribution of capital intensity growth to service sector labour productivity growth actually fell between 1981-1995 and 1995-2000. The factor driving Canada’s superior service sector labour productivity growth has been better multifactor productivity growth, suggesting a productivity convergence to the U.S. level. A faster pace of human capital accumulation relative to the United States, as measured by growth in the proportion of workers with a university degree, fostered the catch-up process of Canadian service industries. Le secteur canadien des services a affiché une bonne performance ces dernières années sur le plan de la croissance de la productivité du travail et de la productivité multifactorielle, tant en termes absolus que par rapport aux États-Unis, compensant en bonne partie la moins bonne performance du secteur manufacturier. La croissance de la productivité du travail du secteur des services a également connu une accélération marquée tant au Canada qu’aux États-Unis ces dernières années par rapport aux périodes antérieures. L’objectif de cet article est de cerner les facteurs expliquant ce succès relatif du Canada. Les sources de l’accélération de la croissance de la productivité du travail du secteur des services différaient entre les deux pays. Au Canada, l’augmentation de la croissance de la productivité multifactorielle explique 70 % de l’accélération de la croissance de la productivité du travail. Aux États-Unis, en revanche, l’intensification du capital et de l’utilisation des intrants intermédiaires ont été les principaux contributeurs à cette accélération. Au Canada, la contribution de la croissance de l’intensité capitalistique à la croissance de la productivité du travail du secteur des services a en fait diminué entre 1981-1995 et 1995-2000. Le facteur expliquant la croissance supérieure de la productivité du travail du secteur des services canadien a été une meilleure croissance de la productivité multifactorielle, ce qui suggère une convergence de la productivité vers le niveau américain. Un rythme plus rapide d’accumulation de capital humain par rapport aux États-Unis, mesuré par la croissance de la proportion de travailleurs diplômés universitaires, a également contribué à ce succès. [Download full PDF report](https://csls.ca/pdf/csls2004-01.pdf)