Canada, like the United States, had become accustomed to productivity rising at a rapid pace during the 1950s and 1960s. With this growth in productivity came steady advances in real incomes. But the trend towards higher productivity slowed abruptly in the early 1970s. At the time, policy-makers, business, and labour assumed that the slowdown was cyclical. It wasn’t.
Economists still don’t have a complete explanation for it. But what we now understand more clearly is that the productivity increases of the 1950s and 1960s had a lot to do with the application throughout the economy of earlier advances in general-purpose technology. Businesses took advantage of various technological advances in many diverse fields, enabling them to realize significant productivity gains.