Future Productivity Growth in Canada: Comparing to the United States

Abstract

In this second contribution to the Symposium included in this volume on Future Productivity in Canada, Tiff Macklem of the Bank of Canada compares sources of recent productivity growth in Canada and the United States. Macklem sees aggregate labour productivity growth in Canada advancing at around a 2 per cent average annual rate in the medium term. This view is based on the increased share of machinery and equipment investment in GDP, Canada's high degree of exposure to international trade and investment, the supportive macro-economic environment of low inflation and improved fiscal positions, increased spillovers from rapid and sustained U.S. productivity growth, and the significant gap between Canadian and U.S. productivity levels, which suggests potential for catch-up.Canada, Labour Productivity Growth, United States, Machinery, Equipment , Investment, Human Capital, Growth Accounting, Openness, Trade, Research, Development