Canadian Productivity Growth: Stuck in the Oil Sands

 Canadian Journal of Economics, vol. 57(2), May 2024, 478-501.

33 Pages Posted: 25 Apr 2023 Last revised: 6 Jun 2024

Date Written: April 11, 2023

Abstract

We study the behaviour of Canadian Total Factor Productivity (TFP) growth over the past 60 years. We find that the observed stagnation during the last 20 years is entirely accounted for by the Oil sector. Higher oil prices made capital-intensive sources of oil like the oil sands viable to extract on a commercial scale. However, the greater input required per barrel of oil slowed TFP growth. Comparing Canadian TFP growth to those of the United States and Norway reinforces these results. However, our result should not be interpreted to carry any welfare implications.

Keywords: Canadian Productivity Stagnation, Oil Sector, TFP.

JEL Classification: D24, E01, O47, O51

Suggested Citation

Loertscher, Oliver and Pujolas, Pau, Canadian Productivity Growth: Stuck in the Oil Sands (April 11, 2023).  Canadian Journal of Economics, vol. 57(2), May 2024, 478-501., Available at SSRN: https://ssrn.com/abstract=4417319 or http://dx.doi.org/10.2139/ssrn.4417319

Oliver Loertscher

McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

Pau Pujolas (Contact Author)

McMaster University ( email )

1280 Main Street West
Hamilton, Ontario L8S 4M4
Canada

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