Chart 2:  Potential output growth has been on a downward trend since 2000, but is expected to remain flat in the near future Annual data  % 4  3  2  1  0  Trend labour input Source: Bank of Canada estimates and projections  Trend labour productivity  Potential output growth Last data plotted: 2021  Two observations are important.
First, the chart shows a secular, or persistent, decline in TLI and, thus, in potential output growth. Population aging is the biggest reason, and it is only partly offset by immigration.iv Second, TLP’s contribution to potential output growth has also declined somewhat from the period before the global financial crisis. TLP growth is expected to increase modestly in the coming years.