Editing Economy of Canada (section)

==Measuring productivity==
Productivity measures are key indicators of economic performance and a key source of economic growth and competitiveness. OECD's<ref group=notes>The OECD produces an annual report on member nations who share the goal of "contributing to the development of the world economy" by attaining the "highest sustainable economic growth and employment and a rising standard of living while maintaining financial stability".</ref> ''Compendium of Productivity Indicators'',<ref name=OECDcompend2012 /> published annually, presents a broad overview of productivity levels and growth in member nations, highlighting key measurement issues. It analyses the role of "productivity as the main driver of economic growth and convergence" and the "contributions of labour, capital and MFP in driving economic growth".<ref name=OECDcompend2012>{{cite report|url=http://www.keepeek.com/Digital-Asset-Management/oecd/industry-and-services/oecd-compendium-of-productivity-indicators-2012_9789264188846-en|title='OECD Compendium of Productivity Indicators 2012|publisher=OECD|year=2012|archive-date=August 6, 2017|access-date=June 13, 2013|archive-url=https://web.archive.org/web/20170806135251/http://www.keepeek.com/Digital-Asset-Management/oecd/industry-and-services/oecd-compendium-of-productivity-indicators-2012_9789264188846-en|url-status=dead}} p. 3</ref> According to the definition above "MFP is often interpreted as the contribution to economic growth made by factors such as technical and organisational innovation". Measures of productivity include the [[gross domestic product]] (GDP) and [[total factor productivity]].

===Multifactor productivity===
Another productivity measure, used by OECD, is the long-term trend in multifactor productivity (MFP) also known as [[total factor productivity]] (TFP). This indicator assesses an economy's "underlying productive capacity ('potential output'), itself an important measure of the growth possibilities of economies and of inflationary pressures". MFP measures the residual growth that cannot be explained by the rate of change in the services of labour, capital and intermediate outputs, and is often interpreted as the contribution to economic growth made by factors such as technical and organisational innovation.

According to OECD's annual economic survey of Canada in June 2012, Canada has experienced weak growth of multi-factor productivity (MFP) and has been declining further since 2002. One of the ways MFP growth is raised is by boosting innovation and Canada's innovation indicators such as business R&D and patenting rates were poor. Raising MFP growth is "needed to sustain rising living standards, especially as the population ages".<ref name=OECD2012>{{cite report|title=OECD Economic Surveys Canada June 2012 Overview |url=http://www.oecd.org/eco/50543310.pdf |archive-url=https://web.archive.org/web/20130616120842/http://www.oecd.org/eco/50543310.pdf |archive-date=June 16, 2013 |year=2012 |publisher=Organisation for Economic Co-operation and Development |url-status=live }}</ref>

Since 2010, productivity growth has picked up, almost entirely driven by above average multifactor productivity growth.<ref name=OECD2021>{{cite report|title=OECD Compendium of Productivity Indicators 2021 |url=https://www.oecd-ilibrary.org/sites/f25cdb25-en/1/3/2/index.html?itemId=/content/publication/f25cdb25-en&_csp_=f3624e8b770eac8d5dc12a37d86e806e&itemIGO=oecd&itemContentType=issue |publisher=Organisation for Economic Co-operation and Development }}</ref> However, productivity on the whole still lags behind the upper half of OECD countries such as the United States.<ref name=OECD2018>{{cite report|title=OECD Canada Economic Survey 2018 |url=https://read.oecd-ilibrary.org/economics/oecd-economic-surveys-canada-2018_eco_surveys-can-2018-en#page67 |publisher=Organisation for Economic Co-operation and Development }}</ref> Canada's productivity is now around the median OECD productivity, close to that of Australia. More can be done to increase productivity, such as increasing the productivity of capital through improving the capital stock to output ratio and capital quality. This could be achieved through the liberalization of internal trade barriers, as suggested in the OECD's latest Canadian economic survey.<ref name=OECDSurvey2021>{{cite report|title=OECD Canada Economic Survey 2021 |url=https://read.oecd-ilibrary.org/economics/oecd-economic-surveys-canada-2021_16e4abc0-en#page46 |publisher=Organisation for Economic Co-operation and Development }}</ref>