The explanations range from measurement issues, to economic restructuring in response to large commodity price shocks, to deeper structural determinants, including a poor innovation record, low competition in some sectors and a less-skilled workforce.4 The Canada-U.S. gap may also reflect greater offshoring and foreign affiliate sales by U.S. firms.
Since much of the decline in actual productivity growth in the first half of the 2000s coincided with strong overall economic growth, this suggests that a significant part was structural (and not only cyclical) and therefore affected trend labour productivity growth. Since 2008, however, part of the weak growth has been due to cyclical factors associated with the recession.