However, severe weather conditions earlier in the year resulted in a contraction in the first quarter, and it will be difficult for the economy to achieve the 2,8 to 3,0 per cent growth forecast recently by the US Fed. Nevertheless, the underlying strength appears to be there, and the market consensus is for an annual growth rate of around 2,5 per cent.
I do not have a complete explanation for the productivity slowdown in Canada. But I am prepared to assert that high inflation and the large fiscal deficits through most of the past 25 years were not conducive to productivity growth.