BIS Review 13/2010  5  Some of this undoubtedly reflects the restructuring of industries and the reallocation of capital and labour to new industries. Some may reflect longer-tailed resources investments. There remains the possibility that firms have not yet anticipated intensifying global competitive pressures.
While the Bank does not entirely understand why productivity growth has been as slow as it has been, we do understand the consequences. Slower productivity growth means that the rate of potential growth – the speed limit, if you will – of the Canadian economy has fallen. This has implications for both the growth of Canadian living standards and the conduct of monetary policy.