Difficulties Assessing Multifactor Productivity for Canada

In 2011, Canada's business sector multifactor productivity (MFP) index, as estimated by Statistics Canada, was below that for 1977, a third of a century earlier. Over these years, public policies were enacted to try to improve Canada's productivity. Yet the nation's MFP continued to fall, relative to both the past and Canada's main trading partners. Policymakers and business decision makers need to know whether Canada's MFP statistics accurately reflect the nation's productivity. We argue that they do not.