Industry Productivity Performance in G7 Countries after the Global Financial Crisis: A Canadian Perspective

Abstract

Compared to other G7 countries, Canada performed relatively well after the global financial crisis in both aggregate labour productivity and multifactor productivity (MFP) growth, which is in sharp contrast to its relatively weak performance in the 2000s. The objective of this article is to analyse the sources of Canada’s superior performance by comparing it to other G7 countries. In particular, the article examines industry productivity performance, estimates the contribution of individual industries to both aggregate labour productivity and MFP growth, and highlights the differences between Canada and other G7 countries before and after 2010. To this end, this article develops a methodology to more precisely identify the underlying forces at the industry level that have either propelled or hindered productivity growth, and thereby identify which industries have been at the heart of the changes in productivity performance.