scispace - formally typeset
SciSpace - Your AI assistant to discover and understand research papers | Product Hunt

Journal ArticleDOI

A Comparison of Canadian and U.S. Productivity Levels: An Exploration of Measurement Issues

AbstractThis paper examines the level of labour productivity in Canada relative to that of the United States in 1999. In doing so, it addresses two main issues. The first is the comparability of the measures of GDP and labour inputs that the statistical agency in each country produces. Second, it investigates how a price index can be constructed to reconcile estimates of Canadian and U.S. GDP per hour worked that are calculated in Canadian and U.S. dollars respectively. After doing so, and taking into account alternative assumptions about Canada/U.S. prices, the paper provides point estimates of Canada's relative labour productivity of the total economy in 1999 of around 94% that of the United States. The paper points out that at least a 10 percentage point confidence interval should be applied to these estimates. The size of the range is particularly sensitive to assumptions that are made about import and export prices.

Topics: Partial productivity (57%), Productivity (57%), Total factor productivity (56%), Price index (52%)

Summary (5 min read)

1. Introduction

  • Productivity measures provide an indicator of the efficiency of the economy—in that they compare the amount of output that is produced per unit of inputs devoted to the production process.
  • This in turn affects the quality of cross-country estimates of differences in productivity levels.
  • First, there are differences in the measures being used.
  • Some refer to output per capita, others to output per worker, and still others to measures of total factor productivity.

2. Methodological issues

  • Productivity measures are key indicators of the state of the economy.
  • The measure of labour productivity is only one of several partial statistical measures that describe the efficiency of the production process—that describe how well the economy is doing in terms of transforming inputs into outputs.
  • Other factor inputs include capital, energy and intermediate goods and services.
  • Analysts have used equation 4 to investigate the sources of differences in labour productivity between countries—to ask whether it is just efficiency differences or the differences in other factors like the amount of capital per worker that have contributed to differences in labour productivity and, therefore, to differences in GDP per capita.
  • The authors therefore examine differences in labour productivity between Canada and the United States in this paper.

3.1 Output

  • Measures of output are required for estimates of labour productivity.
  • At the level of the economy, output is captured with GDP.
  • These nonbusiness activities include public health and education facilities as part of non-profit organizations.
  • It is often argued that it is best in these circumstances to remove the sector and consider the business sector separately because aggregate indices for the total economy contain a subset where meaningful information on productivity growth does not exist.

3.1.1 Valuation of output

  • Gross value of production may be valued at the factory gate of the producing unit, including product taxes, excluding product taxes, including or not including revenue received as subsidies, or at the place of the purchasing unit.
  • GDP at basic prices is GDP calculated at market prices less taxes paid on products plus any subsidies on consumption.
  • Economic Analysis Research Paper Series - 14 - Statistics Canada - Catalogue No. 11F0027 No. 028 GDP at market prices (the concept traditionally used in the U.S. industry accounts) is 14% higher than the GDP by factor cost concept that has been the prevalent concept in the Canadian industry accounts since 1950.
  • This leads to large differences between value added at factor cost and value added at market prices for several industries—the retail sector where most sales taxes are collected, refining and petroleum where gasoline taxes are collected, tobacco where tobacco excise taxes are collected, and beverages where alcohol taxes are imposed.

3.1.2 The valuation of financial intermediation services

  • The output of banks and other financial institutions is derived by financial intermediation.
  • And its value is derived as the total property income receivable minus total interest payable.
  • The System of National Accounts determines this allocation in the case of financial services by assuming that the value of the output of financial services accrues to the beneficiaries of the financial intermediation service—either the borrowers or the holders of accounts—in the way of unpriced services.
  • In the United States, the entire output was allocated to depositors, while in Canada it was allocated to both depositors and borrowers.
  • If the entire amount was allocated to consumers, total GDP at market prices in 1999 would increase by about 1.3%; or business sector GDP at market prices would increase by 1.8%.15 With the 2003 revision of the U.S. National Accounts, the difference in methodology has disappeared from the estimates available for total GDP.

3.1.3 The statistical discrepancy

  • The output of the National Accounts is built up in several different ways that, in theory, should give the same result.
  • For expenditures, the Accounts rely on surveys of sales, production, and trade.
  • These different sources measure the same concept, they rarely sum to exactly the same number.
  • Economic Analysis Research Paper Series - 17 - Statistics Canada - Catalogue No. 11F0027 No. 028 In the United States, the statistical discrepancy is handled differently.
  • The difference between the expenditure-based and the income-based GDP is calculated and the entire amount is added to the income side as a separate item to make it equal to the expenditure side.

3.1.4 Defining the business sector

  • Second, there are differences in the ability of statistical agencies to measure productivity in the non-market sector because it is difficult to measure real output in these areas.
  • Until the recent revisions of the NIPA accounts, the U.S. non-business sector was defined somewhat differently.
  • The Business sector of the Canadian economy accounted for 77.2% of the GDP of the total economy in 1999, while it made up 78.2% of the U.S. economy in the same year.
  • 19 The U.S. figures are derived from the 2003 comprehensive revision.

3.2 Relative prices

  • To create measures of productivity that abstract from price changes over time or price differences across countries, the authors need to transform output (GDP or value added) measured in nominal dollars into a statistic that is more akin to a physical concept.
  • In order to transform the relative dollar estimates of total GDP (or industry value added) that are produced in two countries into a measure of relative physical outputs, a measure of relative prices is required.
  • There are several problems that arise when the PPP prices are used to deflate cross-country differences in GDP in order to estimate real output differences for productivity comparisons (Hooper, 1996; Pilat, 1996).
  • But this approach means that only a small number of relative prices are available per industry and leaves the accuracy of the results in question.
  • A Canada/U.S. comparison cannot ignore this issue because of the size of imports and exports.

3.2.1 Pricing imports and exports

  • The authors make use of Canada/U.S. PPPs for 1999 as published by Statistics Canada (Statistics Canada, 2002).
  • For many commodities, the data available in individual countries for transmission to the international agencies was not comprehensive—with a small number of commodities being sampled.
  • The PPP for expenditures (PPPe) can be written as the weighted sum of the ratio of the PPP for domestic production that is consumed (either by consumers, investment or government) in Canada (PPPc) and the PPP for imports that are consumed in Canada (PPPm).
  • But it should be noted that this program produces only the average overall ratio (PPPe), and not the 31.
  • It is also not clear that it is reasonable to assume that imports are set equal to U.S. prices and to choose the exchange rate as the PPP for this group, especially when tariffs on imports into Canada exist and when transport and trade margins have to be added to U.S. products marketed in Canada.35.

3.3.1 Measures of labour input

  • Accurate comparisons of inter-country differences in productivity require not only comparable measures of relative output but also measures of the intensity of factor inputs.
  • As was the case for output measures, the SNA (1993) also defines standards that are meant to be used to produce internationally comparable measures of 36.
  • The latter is often measured with hours worked.

3.3.2 Survey instruments

  • Data on labour inputs are collected by statistical agencies from two separate sources—from firmbased employer surveys on the one hand, and from household surveys on the other hand.
  • Sequences of questions such as these allow estimates to be derived of usual hours worked (without an usual event such as a holiday) that can be used to extrapolate the answers derived from a reference week that contains the special event to other weeks in the month when the survey was not being performed.
  • While a household survey can potentially provide more accurate data in areas that an employer survey cannot, there is nevertheless the question about overall accuracy.
  • In order to investigate the validity of the LFS hours worked number, Williams (2004) compares the results that the ONS Time Use Survey produced to the U.K. Labour Force Survey.

3.3.3 The U.S. methodology for calculating total annual hours worked

  • The United States productivity program primarily uses an employer survey program—the Current Employment Statistics Survey (CES)—to estimate the number of jobs and hours worked.
  • Hours data from the CES corresponds to hours paid not hours worked.
  • Recently, the U.S. has made an attempt to correct this problem by taking the ratio of hours worked of supervisory workers to production workers from the CPS and applying this ratio to the hours worked of production workers from the CES (Eldridge, Manser and Otto, 2004).
  • There is a difference between the two surveys since number of jobs (when there is multiple job-holding) taken from the CES should be larger than number of employees taken from the CPS.

3.3.4 The Canadian methodology for calculating total annual hours worked

  • At Statistics Canada, the volume of hours worked that is used in the productivity program results from a combination of two independent but simultaneous exercises that use the household survey on persons employed, jobs, and hours worked, supplemented with information from the employer survey.
  • Agricultural service workers (taken from the CES) are subtracted to avoid double counting because they are in the farm sector estimates derived from the CPS.
  • This provides a measure of hours actually worked that is then extrapolated to other weeks of the month between the survey reference weeks.
  • For multiple jobholders, the LFS collects information on the usual and actual work hours of additional jobs, thereby providing an estimate of total hours worked on all jobs.

3.3.5 Canada/U.S. labour comparisons

  • Because there can be differences in the estimates of labour input that are derived from different survey instruments, cross-country comparisons in this area need to tread cautiously.
  • And the authors feel that the strength of household surveys for calculating hours worked per job speaks in favour of their use for cross-country comparisons—especially when comparable approaches are used.
  • For the former, there have been too many changes made to the coverage of the SEPH survey in the past 20 years to use it for growth estimates over long periods.
  • In order to calculate the estimate of total hours worked per job for the United States that is comparable to the one used for the Canadian productivity estimates, the authors make use of the U.S. CPS and follow the same procedures used to produce annualised estimates of average hours worked per job from the Canadian LFS.

3.4 Labour productivity levels in Canada and the United States

  • The results of the previous sections are brought together here to provide an estimate of the relative labour productivity of Canada and the United States in 1999.
  • The second estimate assumes that Canadian goods had to be priced slightly below similar U.S. goods to enable them to enter the U.S. market and that U.S. imports end up at landed prices that are slightly above the U.S. price corrected for the exchange rate.
  • The OECD multi country study by Scarpetta, Bassanini, Pilat and Schreyer (2000), which contains, inter alia, Canada and the United States comparisons for 1998, uses data that is less developed than their own.
  • Using the first assumption about the prices of imports and exports, Canadian labour productivity in the total economy is 94% that of the United States.
  • The ratio of real GDP in the non-business sector in Canada compared to the U.S. is much higher than in the business sector because the relative prices that are used in the PPP calculation for government depends more on relative factor prices than actual market prices—because of the way in which PPPs are calculated for non-business sectors.

4. Conclusion

  • This comparison of the levels of labour productivity in Canada and the United States has addressed two main issues.
  • Second, the authors have asked how a price index can be constructed to reconcile estimates of Canadian and U.S. GDP per hour worked that are calculated in Canadian and U.S. dollars respectively.
  • If the authors assume export and import prices are translated directly from one currency to another by the exchange rate, the overall Canadian economy is only about 94% as productive as that of the United States.
  • Suggested confidence intervals around this estimate of at least 10 percentage points and probably higher leave us unable to reject the possibility that the Canadian economy is as productive as the American.
  • Work, therefore, is required to measure more precisely the extent to which capital/labour ratios differ between the two countries and how much of the difference in labour productivity in the business sector might be attributed to this factor.

Did you find this useful? Give us your feedback

...read more

Content maybe subject to copyright    Report

A Comparison of Canadian and U.S.
Productivity Levels: An Exploration
of Measurement Issues
by John R. Baldwin, Jean-Pierre Maynard, Marc Tanguay,
Micro-economic Analysis Division
18-F, R.H. Coats Building, Ottawa, K1A 0T6
Telephone: 1 800 263-1136
This paper represents the views of the authors and does not necessarily reflect the opinions of Statistics Canada.
Catalogue no. 11F0027MIE — No. 028
ISSN: 1703-0404
ISBN: 0-662-39120-9
Research Paper
Economic Analysis (EA) Research Paper Series
Fanny Wong and Beiling Yan

A Comparison of Canadian and U.S. Productivity Levels:
An Exploration of Measurement Issues
by
John R. Baldwin, Jean-Pierre Maynard, Marc Tanguay, Fanny Wong and Beiling Yan
11F0027MIE No. 028
ISSN: 1703-0404
ISBN: 0-662-39120-9
Micro-economic Analysis Division
18-F, R.H. Coats Building
Statistics Canada
Ottawa, ON K1A 0T6
How to obtain more information :
National inquiries line: 1 800 263-1136
E-Mail inquiries: infostats@statcan.ca
January 2005
The authors' names are listed alphabetically.
This paper represents the views of the authors and does not necessarily reflect the opinions of
Statistics Canada.
The authors gratefully acknowledge comments from many people at Statistics Canada, Finance
Canada, the Bureau of Labor Statistics and from the Vancouver Productivity Conference in June
2004 organised by Erwin Diewert and Alice Nakamura.
Published by authority of the Minister responsible for Statistics Canada
© Minister of Industry, 2005
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any
form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior written
permission from Licence Services, Marketing Division, Statistics Canada, Ottawa, Ontario, Canada K1A 0T6.
Aussi disponible en français

Economic Analysis Research Paper Series - 3 - Statistics Canada - Catalogue No. 11F0027 No. 028
Table of Contents
Abstract .................................................................................................................................................................... 4
Executive summary.............................................................................................................................................. 5
1. Introduction...................................................................................................................................................... 7
2. Methodological issues.................................................................................................................................. 10
3. Data issues........................................................................................................................................................ 12
3.1 Output .............................................................................................................................................................. 12
3.1.1 Valuation of output................................................................................................................................... 13
3.1.2 The valuation of financial intermediation services .................................................................................. 15
3.1.3 The statistical discrepancy....................................................................................................................... 16
3.1.4 Defining the business sector..................................................................................................................... 17
3.2 Relative prices.................................................................................................................................................. 17
3.2.1 Pricing imports and exports..................................................................................................................... 22
3.3 Labour input..................................................................................................................................................... 26
3.3.1 Measures of labour input ......................................................................................................................... 26
3.3.2 Survey instruments ................................................................................................................................... 28
3.3.3 The U.S. methodology for calculating total annual hours worked........................................................... 32
3.3.4 The Canadian methodology for calculating total annual hours worked................................................. 35
3.3.5 Canada/U.S. labour comparisons ............................................................................................................ 36
3.4 Labour productivity levels in Canada and the United States .......................................................................... 39
4. Conclusion......................................................................................................................................................... 41
Appendix A: PPPs for Canada/U.S. comparison................................................................................... 44
Appendix B: Estimates of labour inputs using comparable methodology................................... 45
Appendix C: Results when all health and education are placed in non-business..................... 47
References.............................................................................................................................................................. 48

Economic Analysis Research Paper Series - 4 - Statistics Canada - Catalogue No. 11F0027 No. 028
Abstract
This paper examines the level of labour productivity in Canada relative to that of the United
States in 1999. In doing so, it addresses two main issues. The first is the comparability of the
measures of GDP and labour inputs that the statistical agency in each country produces. Second,
it investigates how a price index can be constructed to reconcile estimates of Canadian and U.S.
GDP per hour worked that are calculated in Canadian and U.S. dollars respectively. After doing
so, and taking into account alternative assumptions about Canada/U.S. prices, the paper provides
point estimates of Canada’s relative labour productivity of the total economy in 1999 of around
94% that of the United States. The paper points out that at least a 10 percentage point confidence
interval should be applied to these estimates. The size of the range is particularly sensitive to
assumptions that are made about import and export prices.

Economic Analysis Research Paper Series - 5 - Statistics Canada - Catalogue No. 11F0027 No. 028
Executive summary
This paper examines the level of labour productivity in Canada relative to that of the United
States in 1999. In doing so, it addresses two main issues. The first is the comparability of the
measures of GDP and labour inputs that the statistical agency of each country produces. Second,
it investigates how a price index can be constructed to reconcile estimates of Canadian and U.S.
GDP per hour worked that are calculated in Canadian and U.S. dollars respectively.
In the first part of the paper, we approach this task by harmonizing output and labour input
measures between the two countries. Harmonizing output measures required few modifications.
Harmonizing the measures of labour input required slightly larger modifications. Labour input is
defined as total hours worked and is obtained by estimating total number of jobs and multiplying
it by hours worked per job. The number of jobs is taken from the official estimates of both
countries. But the official hours worked per job in the U.S. is obtained from a source and a
methodology that is quite different than in Canada. For the purpose of comparing productivity
levels between Canada and the United States, we construct an estimate of U.S. hours worked per
job using a U.S. survey that is comparable to the one used in Canada—a household survey. In
deriving this estimate, we also adopt a similar methodology to that used in Canada to estimate
average hours worked. The effect of this change increased the U.S. estimates of labour inputs
relative to Canada compared to official estimates of hours worked for the United States.
Constructing a price index that can be applied to the two separate estimates of productivity (one
in Canadian dollars and one in U.S. dollars) is more difficult than the reconciliation of the
estimates of GDP and labour. A price index is required to transform Canadian GDP per hour
worked calculated in Canadian dollars and U.S. GDP per hour worked calculated in U.S. dollars
to a common price structure.
Purchasing power price (PPP) indices are used to compare GDP levels across countries. We note
that PPPs are statistical constructs and, as such, should have confidence intervals applied to
them. The OECD recommends that the confidence intervals of real expenditures be at least 10
percentage points around the point estimate—but in practice, statistical agencies like the
Australian Bureau of Statistics and Eurostat apply wider bands that involve 15 to 20 percentage
points.
Moreover, there is a particular problem in using the official PPPs that are derived for comparing
expenditures when it comes to comparing productivity levels. The PPP relatives that are
produced by Statistics Canada are calculated for the purpose of examining differences in
standards of living—not for comparing differences in productivity levels. In order to adapt the
price relative from the PPP used for comparing standards of living to a price relative for a
productivity comparison, assumptions have to be made about whether Canadian exports are
priced exactly at U.S. prices corrected for the exchange rate (satisfying the law of one price) and
whether imports end up at landed prices in Canada that are exactly equal to U.S. prices corrected
by the exchange rate.
Using the assumption that the law of one price holds, Canadian labour productivity in the total
economy is 94% that of the United States. We must recognize the estimate of 94% is a

Citations
More filters

Journal ArticleDOI
Abstract: In this paper, we make a comparison of industry output, inputs and productivity growth and levels between seven advanced economies (Australia, Canada, France, Germany, the Netherlands, United Kingdom and United States). Our industry-level growth accounts make use of input data on labour quantity (hours) and composition (schooling levels), and distinguish between six different types of capital assets (including three information and communication technology (ICT) assets). The comparisons of levels rely on industry-specific purchasing power parities (PPPs) for output and inputs, within a consistent input-output framework for the year 1997. Our results show that differences in productivity growth and levels can be mainly traced to market services, not to goods-producing industries. Part or the strong productivity growth in market services in Anglo-Saxon countries, such as in Australia and Canada, may be related to relatively low productivity levels compared with the United States. In contrast, services productivity levels in continental European countries were on par with the United States in 1997, but growth in Europe was much weaker since then. In terms or factor input use, the United States is very different from all other countries, mostly because or the more intensive use of ICT capital in the United States.

132 citations


Posted Content
Abstract: This chapter covers the theory and methods for productivity measurement for nations. Labor, multifactor and total factor productivity measures are defined and are related to each other and to gross domestic product (GDP) per capita. Their growth over time and relative counterparts are defined as well. Different conceptual meanings have been proposed for a total factor productivity growth (TFPG) index. These are easiest to understand for the case in which the index number problem is absent: a production process that involves one input and one output (a 1-1 process). It is easily seen that four common concepts of TFPG all lead to the same result in the 1-1 case. Moving on to a general N input, M output production scenario, we demonstrate that a Paasche, Laspeyres or Fisher index number formula provides a measure for all four of the concepts of TFPG introduced for the 1-1 case. This is an advantage of the Paasche-Laspeyres-Fisher family of formulas. When multiple inputs or outputs are involved, there is the problem of choosing among alternative functional forms. The axiomatic and economic approaches to index formula choice are reviewed. In addition, we briefly cover the Divisia index number approach and growth accounting, including the KLEMS (capital, labor, energy, materials and services) approach. The gross output measures of the KLEMS approach are contrasted with value added output measures such as GDP. Also, an alternative family of revenue function based productivity growth indexes proposed by Diewert, Kohli and Morrison (DKM) is outlined. The DKM approach facilitates the decomposition of productivity growth into economically meaningful components. This approach is useful, for example, for examining the effects of changes in the terms of trade on productivity growth.

51 citations


Cites background from "A Comparison of Canadian and U.S. P..."

  • ...On the labor input, see for example Ahmad et al. (2003), Baldwin, Maynard and Wong (2005), Baldwin et al. (2005), Breshnahan, Brynjolfsson and Hitt (2002), Nakamura (1995), Jorgenson and Fraumeni (1992), Jorgenson, Gollop and Fraumeni (1987), Tang and MacLeod (2005), and Triplett (1990, 1991)....

    [...]


Journal ArticleDOI
Abstract: This paper analyzes the reasons for the Canada-US labour productivity gap, which is mainly explained by the multifactor productivity (MFP) gap. Based on panel data for 41 industries, the regression results show that differences in the machinery and equipment (M&E) capital-labour ratio, trade openness, and capacity utilization explain differences in the Canada-US MFP gap across industries. The M&E capital intensity gap is the dominant source of the MFP gap. Lower wages, R&D intensity, and skills levels, as well as higher investment goods prices in Canada are the major determinants of the M&E capital intensity gap.

28 citations


Posted Content
Abstract: Diewert and Yu estimate that multifactor productivity grew at a 1.0 per cent average annual rate in the Canadian business sector from 1961 to 2011, compared to Statistics Canada’s Canadian Productivity Program estimate of 0.3 per cent. The major reason for this difference is that Diewert and Yu find capital services grew at 3.0 per cent per year, compared to Statistics Canada’s estimate of 4.8 per cent. This article identifies and discusses the three reasons for this discrepancy. First, while the Canadian Productivity Program aggregates capital services across industries to derive the capital input measure at the level of the business sector, Diewert and Yu use a top-down approach and directly compute capital and labour input series at the business sector level. Second, there are differences in the way the price of capital services is computed. Third, the Canadian Productivity Program bases its capital measures on a more detailed list of assets than Diewert and Yu. Statistics Canada estimates follow international guidelines and practices adopted by other statistical agencies in order to make estimates internationally comparable.

23 citations


Journal ArticleDOI
Abstract: Baldwin and Gu (2008) provide an overview of the productivity program at Statistics Canada and a brief description of Canada’s productivity performance This paper provides an update of Canada’s productivity performance in more recent years and analyses the sources of weak productivity performance in Canada since 2000

23 citations


Additional excerpts

  • ...Baldwin et al. (2005), Maynard (2007c), Baldwin, Gu and Yan, (2008)....

    [...]

  • ...See Baldwin et al. (2005) and Maynard (2007c)....

    [...]


References
More filters

Book
01 Jan 1982
Abstract: In 2020, the employment rate went down slightly for those aged 20 to 59 compared with 2018. Men’s employment rate fell and women's employment rate remained almost unchanged. The employment rate among mothers of families with underage children rose from 77.2 to 79.2 per cent. The employment rate went up most among those mothers whose youngest child was aged under three. The employment rate fell most among men without children aged under 18. These data derive from Statistics Finland’s table release Labour Force Survey 2020, families and work.

1,527 citations


Report SeriesDOI
Abstract: This paper discusses growth performance in the OECD countries over the past two decades. Special attention is given to developments in labour productivity, allowing for human capital accumulation, and multifactor productivity (MFP), allowing for changes in the composition and quality of physical capital. The paper suggests wide (and growing) disparities in GDP per capita growth, while differences in labour productivity have remained broadly stable. These patterns are explained by different employment growth rates across countries. In the most recent years, a rise in MFP growth in ICT-related industries has boosted aggregate growth in some countries (e.g. the United States) ...

286 citations




Report SeriesDOI
Abstract: This paper provides estimates of labour productivity levels in OECD manufacturing, for 9 countries and 36 industrial sectors. It also provides an overview of some of the available evidence on cross-country productivity differences in the service sector. The paper uses industry-specific conversion factors to calculate productivity levels, based on available industry-of-origin studies and material from the expenditure approach to international comparisons. After a discussion of some methodological issues, the paper describes the estimation of manufacturing productivity levels in detail, while also referring to some other recent work on the issue. The variation in cross-country productivity levels appears to be quite large in the OECD area, suggesting that there may be scope for further productivity catch-up in many countries and many sectors ...

99 citations


Frequently Asked Questions (2)
Q1. What contributions have the authors mentioned in the paper "Economic analysis (ea) research paper series" ?

In this paper, the authors make a comparison between Canada and the United States in terms of total factor productivity. 

It is clear that a more precise estimate requires further work on Canadian export and import prices—a subject that has received very little empirical attention. Suggested confidence intervals around this estimate of at least 10 percentage points and probably higher leave us unable to reject the possibility that the Canadian economy is as productive as the American. But equally, the authors can not reject the possibility that Canada is less than 90 % as productive as the U. S. economy. The authors also need to extend their comparisons of the business sector to ask whether there are particular sectors where Canada lags behind the United States.