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The chronic productivity gap between Canada and the U.S. is widening, according to a new study by the Business Development Bank of Canada (BDC), with serious negative implications for Canada’s standard of living.

The Montreal-based bank, a federal Crown corporation, said its findings are based on a July survey of 1,500 small and mid-sized businesses across the country. Among the study’s key findings:

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• Canadian firms are far less productive, compared to their U.S. counterparts, than they were 35 years ago. On a Gross Domestic Product (GDP) per hour basis, Canadian firms generate just 73 per cent as much output as their U.S. peers, down from over 90 per cent in the 1980s.

• Productivity among small and mid-size firms in Canada is particularly poor. It’s less than half (47 per cent) that of large businesses. In the U.S., the gap is much less, with small or mid-size firms 67 per cent as productive as major corporations.