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This paper has three main objectives. First, it presents the long-term trends in outsourcing and offshoring across Canadian industries. Second, it examines the relationship between offshoring and changes in trade patterns at the industry level. It focuses on two major drivers that some have suggested are behind the recent trends toward offshoring: globalization and technological changes associated with information and communications technologies. Third, the paper examines the economic impact of offshoring by investigating the relationship between the extent of offshoring and productivity growth, shifts to high value-added activities and changes in labour markets.

Keywords: offshoring, productivity, employment