Industrial structure change and the widening Canada-US labor productivity gap in the post-2000 period

Abstract

Canada's deterioration in labor productivity performance in the post-2000 period, especially relative to the United States, has been a major concern for policy makers. From an industrial structure perspective, this article shows that the faster loss of the manufacturing base in Canada than in the United States and the deterioration in the productivity performance of Canadian large manufacturing firms relative to their US counterparts were the main factors associated with the widening Canada-US labor productivity gap in the post-2000 period.