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Productivity performance of the Canadian business sector relative to its U.S. counterpart has been the subject of numerous recent studies. However, previous work has focused mainly on the manufacturing sector to explain the Canada-U.S. gap, without really exploring the role played by other industry groups. The slower productivity growth in Canada, compared with that in the United States is often identified as the main factor explaining the growing Canada-U.S. real income gap per capita. Since 1981, Canada's standard of living performance has lagged, on average, behind that of the United States. The major break in the Canada-U.S. productivity performance seems to have occurred around 1985, when productivity growth in Canada slowed significantly, relative to U.S. growth. Productivity data for Canada are from Statistics Canada.