Services industries account for almost three-quarters of both gross domestic product and employment in Canada, a trend that Canada shares with other G-7 countries. Furthermore, the services sector has been responsible for most of Canada's employment creation and much of its productivity growth over the past decade and the sector's importance to the Canadian economy continues to increase. Thirty renowned experts contribute to this volume, which is aimed at better understanding the dynamics of Canadian services industries and identifying the types of policies most likely to improve their innovation and productivity performance.

This paper compares standards of living between Canadian provinces and US states, using gross domestic product (GDP) per capita as a measure. It first discusses the framework of the analysis and the empirical issues involved, then presents results for provinces, states, and regions with regard to the standard of living and productivity. Appendices include discussion of the comparability of Canadian and US GDP measures.

This paper assesses the impact of the Canada-US Free Trade Agreement (FTA) on Canadian manufacturing during the 1989-1996 period. The estimated effects of the tariff concessions are calculated for manufacturing as a whole as well as for the most impacted industries (those industries faced with the largest tariff cuts). The paper examines impacts on a number of performance indicators, including employment, earnings, trade, output, number of plants, and productivity.

The first chapter of this document looks briefly at some of the factors underlying recent patterns of foreign investment. The next chapter of the paper discusses Industry Canada (IC) research that pertains to the role of foreign direct investment and the factors underlying recent investment trends. Chapter 3 considers the policy implications of the IC research in the context of Canada's role as both a significant host and an important source of foreign investment. In addition to examining the need for government intervention in foreign investment markets, this section considers the implications of the studies' findings for general government policy. Chapter 4 looks at foreign investment policy in an international context. The IC studies that examine foreign investment barriers and that have something to say about how to improve the international environment for foreign investment are discussed in this section. The paper's conclusions are presented in chapter 5.

This document sets out a plan to develop a partnership among government, business, and all Canadians to achieve new social & economic benefits through innovation. The introduction reviews the importance of innovation & the knowledge economy. Section 2 assesses Canada's innovation performance and the factors affecting innovation outcomes. Section 3 reviews government programs that supported innovation from 1995 to 2001. Sections 4 to 7 elaborate on Canada's innovation challenge and proposes goals, targets, and federal priorities in the areas of knowledge performance, skills development, and improving the innovation environment. Section 8 proposes development of innovation in technology clusters and in smaller communities. Section 9 is a call to action for federal partners in business, provincial/territorial government, and higher education. The final section outlines next steps in the national innovation strategy. The appendix includes an overview of innovation strategies in other countries.

The objectives of this compilation of papers are to quantify the sources of economic growth at the industry level in Canada & the United States and to assess the relative competitiveness of Canadian & US industries. The first paper focusses on the recent revival of US economic growth, attributing the rise in growth to a surge of investment in computers, software, & communications equipment and to a jump in the growth rate of total factor productivity. The second paper adopts constant quality indices of capital & labour inputs to each of 122 industries studied in Canada. Five asset types and 168 labour input types are considered in an assessment of output growth and its sources. The third paper compares output growth between Canada & the US in 33 industries, aggregating capital input in both countries to four asset types so that the underlying data used in the study are compatible. The final paper focusses on international competitiveness between Canadian & US industries, first constructing purchasing power parities (PPPs) for output & inputs by industry, then using hourly labour compensation rates to estimate labour input PPPs. Appendices include additional papers on estimating output, capital services, labour input, productivity, capital inputs, workforce composition, and net capital stock & depreciation profiles.

This study focuses on regulatory and standard-related barriers to trade, examining the European approach to reducing such barriers with a view to inform and perhaps improve Canadian initiatives. The study first reviews the program and institutions adopted by the European Union to remove regulatory barriers to trade, as well as basic principles related to trade barrier reduction. Harmonization of national regulations and standards, enforcement and dispute resolution procedures, and the effectiveness of European Commission policies to reduce regulatory barriers are discussed. The study then analyzes the relevance of European approaches to Canadian attempts to promote freer movement of products and services within Canada. Finally, actions are recommended to strengthen the trade liberalization process in Canada.

This volume was prepared by a select group of international experts in response to a need expressed by the Canadian government to identify and analyze some of the major challenges facing governments in conducting business in the knowledge-based economy. Special emphasis is placed on identifying the policy issues which governments will need to address in the upcoming years. It presents essays in three primary categories: trends and forces shaping the new reality; re-structuring and re-organizing in a knowledge-based economy, key governance issues in the knowledge-based economy. Part one describes the salient features of the knowledge-based economy: What are its economic underpinnings? What are its technological characteristics? Whereas, in the past, growth was determined primarily by the availability of land, natural resources, labour, and capital, at the end of the 20th century knowledge has become the major factor of economic growth. Part two examines management issues and economic phenomena typical of a knowledge-based economy. What makes new technology adoption and implementation successful? What can government do to make it more successful?