Decomposing Canada’s Post- 2000 Productivity Performance and Pandemic-Era Productivity Slowdown

Average ity growth rates in the non-business sec- productivity growth in the United States tor that are markedly lower than the non- in the 2019-2022 period exceeded that in business sector in the United States, but Canada by 1.43 percentage points. [...] Why non-business sector slightly smaller than the absolute gap ob- productivity growth should be significantly served in the 2000-2008 subperiod; how- lower in the United States than in Canada ever, the gap in relative terms is by far is puzzling and a topic for further research; the largest between 2019 and 2022, with for now we tend to place more reliance on average productivity growth in the Un. [...] re-allocation-driven boost to productivity We now turn to an examination of the in the United States in 2020 seems to effect of the pandemic on the Canada- have manifested in a quicker return to nor- United States productivity gap, and in par- mal when compared to Canada. [...] Al- tivity with the onset of the pandemic in together, these asymmetric effects resulted 2020, this increase was larger in Canada in a reduction of Canadian business sector where year-over-year productivity growth productivity relative to the United States, was 8.60 per cent compared to just 4.42 reducing the Canadian level to 69 per cent per cent in the United States. [...] The third was to use growth 11 While it is true that the United States, generally at the forefront of scientific innovation in many sectors, has not seen much of a decline in productivity growth in 2000-2022 compared to 1981-2000, this is because of very strong productivity growth in the United States in the early 2000s.