Author Description

The goal of this paper is to measure the productivity gap between Canadian and US firms, and to investigate why Canada's productivity performance has deteriorated compared to that of the United States since 1985. It uses firm-level data to compare productivity levels between firms in five broad sectors: manufacturing; mining; transportation, communications and utilities; retail and wholesale trade; services. It then considers differences in labour quality, research and development, capacity utilization, firm size and returns to scale as possible explanations for the gap and the deterioration in each sector. In addition, it explores the difference in industrial structure for manufacturing.