Appendix E
Results based on Bureau of Economic Analysis depreciation rates

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Table E.1
Decomposition of Canadian-U.S. aggregate capital intensity gap, by asset class, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Ki/K3 Canada Ki/K United States Gap Asset composition Intensity (contribution)
(1) (2) (3) (4) (5) (6)=(4)-(5) (7)=(3)-(8) (8)
  ratio percent
Total 1.97 1.73 13.9 100.0 100.0 0.0 -3.6 17.4
ICT M&E 4 0.12 0.19 -35.1 4.3 6.8 -2.5   -2.4
Non-ICTM&E 0.40 0.43 -7.4 19.3 22.8 -3.4   -1.6
Engineering 0.64 0.25 150.5 32.1 15.7 16.4   24.5
Building 0.82 0.88 -6.2 44.2 54.8 -10.5   -3.1

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an asset in total capital stock.

4. Information and communications technology machinery and equipment.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.

Table E.2
Decomposition of Canadian-U.S. aggregate capital intensity gap, by industry, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Yi/Y3 Canada Yi/Y United States Gap Structure contribution Intensity contribution Residual contribution
(1) (2) (3) (4) (5) (6)=(4)-(5) (7) (8) (9)=(3)-(7)-(8)
  ratio percent
Agriculture 4.19 2.45 71.4 1.8 1.3 0.5   1.3  
Forestry, fishing, hunting and mining 4.90 5.34 -8.1 9.5 2.2 7.4   -0.7  
Construction 0.42 0.53 -21.4 7.4 6.5 0.8   -1.0  
Manufacturing 1.00 1.12 -11.3 21.8 17.7 4.1   -1.9  
Wholesale trade 0.40 0.69 -42.4 7.1 6.6 0.5   -2.4  
Retail trade 0.78 1.01 -23.5 7.5 8.1 -0.5   -1.6  
Transportation, warehousing and utilities 4.43 3.84 15.4 9.4 6.7 2.7   1.9  
Information 2.20 1.92 14.8 4.6 6.1 -1.6   0.8  
Finance, insurance, real estate and rental and leasing 3.87 3.15 22.8 15.1 20.2 -5.1   5.4  
Professional and business services 0.29 0.65 -55.8 9.4 16.4 -7.1   -6.3  
Other services 1.15 1.55 -25.8 6.4 8.1 -1.7   -1.8  
Total business sector 1.97 1.73 13.9 100.0 100.0 0.0 22.0 -6.4 -1.7

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an industry in gross domestic product.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.

Table E.3
Decomposition of Canadian-U.S. information and communications technology capital intensity gap, by industry, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Yi/Y3 Canada Yi/Y United States Gap Structure contribution Intensity contribution Residual contribution
(1) (2) (3) (4) (5) (6)=(4)-(5) (7) (8) (9)=(3)-(7)-(8)
  ratio percent
Agriculture 0.01 0.02 -30.1 1.8 1.3 0.5   -0.3  
Forestry, fishing, hunting and mining 0.02 0.07 -70.3 9.5 2.2 7.4   -4.0  
Construction 0.02 0.08 -81.6 7.4 6.5 0.8   -6.9  
Manufacturing 0.04 0.08 -45.8 21.8 17.7 4.1   -8.4  
Wholesale trade 0.08 0.15 -42.6 7.1 6.6 0.5   -3.3  
Retail trade 0.06 0.07 -13.2 7.5 8.1 -0.5   -0.8  
Transportation, warehousing and utilities 0.12 0.34 -63.0 9.4 6.7 2.7   -9.0  
Information 0.89 0.76 17.0 4.6 6.1 -1.6   3.4  
Finance, insurance, real estate and rental and leasing 0.14 0.20 -26.9 15.1 20.2 -5.1   -5.1  
Professional and business services 0.16 0.22 -29.5 9.4 16.4 -7.1   -4.5  
Other services 0.07 0.05 43.4 6.4 8.1 -1.7   1.8  
Total business sector 0.12 0.19 -35.1 100.0 100.0 0.0 -4.7 -36.9 6.5

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an industry in gross domestic product.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.

Table E.4
Decomposition of Canadian-U.S. non-information and communications technology capital intensity gap, by industry, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Yi/Y3 Canada Yi/Y United States Gap Structure contribution Intensity contribution Residual contribution
(1) (2) (3) (4) (5) (6)=(4)-(5) (7) (8) (9)=(3)-(7)-(8)
  ratio percent
Agriculture 1.17 1.17 -0.4 1.8 1.3 0.5   0.0  
Forestry, fishing, hunting and mining 0.49 1.02 -51.9 9.5 2.2 7.4   -4.2  
Construction 0.27 0.34 -21.6 7.4 6.5 0.8   -1.4  
Manufacturing 0.47 0.61 -22.5 21.8 17.7 4.1   -6.0  
Wholesale trade 0.11 0.36 -69.1 7.1 6.6 0.5   -6.3  
Retail trade 0.19 0.19 -2.0 7.5 8.1 -0.5   -0.1  
Transportation, warehousing and utilities 0.91 1.09 -16.8 9.4 6.7 2.7   -2.6  
Information 0.02 0.18 -87.8 4.6 6.1 -1.6   -7.0  
Finance, insurance, real estate and rental and leasing 0.58 0.38 50.7 15.1 20.2 -5.1   7.8  
Professional and business services 0.05 0.15 -64.7 9.4 16.4 -7.1   -8.0  
Other services 0.18 0.33 -46.3 6.4 8.1 -1.7   -3.5  
Total business sector 0.40 0.43 -7.4 100.0 100.0 0.0 28.3 -31.1 -4.6

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an industry in gross domestic product.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.

Table E.5
Decomposition of Canadian-U.S. building capital intensity gap, by industry, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Yi/Y3 Canada Yi/Y United States Gap Structure contribution Intensity contribution Residual contribution
(1) (2) (3) (4) (5) (6)=(4)-(5) (7) (8) (9)=(3)-(7)-(8)
  ratio percent
Agriculture 1.98 1.26 57.8 1.8 1.3 0.5   1.1  
Forestry, fishing, hunting and mining 0.33 0.88 -62.6 9.5 2.2 7.4   -3.8  
Construction 0.13 0.11 20.3 7.4 6.5 0.8   0.7  
Manufacturing 0.40 0.43 -7.0 21.8 17.7 4.1   -1.1  
Wholesale trade 0.19 0.19 -0.5 7.1 6.6 0.5   0.0  
Retail trade 0.51 0.76 -32.8 7.5 8.1 -0.5   -2.8  
Transportation, warehousing and utilities 0.39 0.26 48.7 9.4 6.7 2.7   2.3  
Information 0.30 0.29 3.3 4.6 6.1 -1.6   0.1  
Finance, insurance, real estate and rental and leasing 3.16 2.59 21.8 15.1 20.2 -5.1   7.8  
Professional and business services 0.08 0.26 -69.2 9.4 16.4 -7.1   -8.8  
Other services 0.90 1.15 -22.2 6.4 8.1 -1.7   -1.9  
Total business sector 0.82 0.88 -6.2 100.0 100.0 0.0 0.8 -6.3 -0.7

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an industry in gross domestic product.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.

Table E.6
Decomposition of Canadian-U.S. engineering capital intensity gap, by industry, based on Bureau of Economic Analysis depreciation rates, business sector, 2003 (1997 dollars)

  K/Y1 Canada K/Y United States Gap2 Yi/Y3 Canada Yi/Y United States Gap Structure contribution Intensity contribution Residual contribution
(1) (2) (3) (4) (5) (6)=(4)-(5) (7) (8) (9)=(3)-(7)-(8)
  ratio percent
Agriculture 1.04 0.00 -100.0 1.8 1.3 0.5   -16.7  
Forestry, fishing, hunting and mining 4.06 3.35 21.4 9.5 2.2 7.4   3.7  
Construction 0.00 0.00 -13.8 7.4 6.5 0.8   -0.5  
Manufacturing 0.09 0.01 1305.6 21.8 17.7 4.1   33.0  
Wholesale trade 0.01 0.00 1140.7 7.1 6.6 0.5   9.1  
Retail trade 0.02 0.00 460.7 7.5 8.1 -0.5   7.1  
Transportation, warehousing and utilities 3.01 2.16 39.4 9.4 6.7 2.7   10.1  
Information 1.00 0.70 43.4 4.6 6.1 -1.6   3.3  
Finance, insurance, real estate and rental and leasing 0.01 0.01 -37.8 15.1 20.2 -5.1   -4.2  
Professional and business services 0.01 0.04 -69.5 9.4 16.4 -7.1   -8.1  
Other services 0.01 0.02 -69.8 6.4 8.1 -1.7   -4.4  
Total business sector 0.64 0.25 150.5 100.0 100.0 0.0 96.1 32.3 22.1

1. Capital–gross domestic product ratio.

2. Gap is measured as the percent difference between Canada and the United States.

3. Share of an industry in gross domestic product.

Note: Results shown are from authors' calculations.

Sources: Statistics Canada; and Bureau of Economic Analysis.