This study describes and analyses the services-to-business sector which, on behalf of the advertisers, prepares and places in media just under one-half of the advertising directed to Canadian buyers. The sector consists quite visibly of advertising agencies, and of a multitude of supporting businesses about which there is very little information. Total revenues of the sector are at the $1.5 billion mark; its share of the gross domestic product is in slight decline.

Despite its modest size, the sector's member firms play a crucial role in disseminating market information in Canada's economy. That role, its history and its organizational underpinning are described at length. The sector is intensive in human capital and readily adaptive to technological change. Yet its growth appears to depend on changes in the economy's output and is less dynamic than that of business services in general.

In this study, Professor Easton points out that although Canadians spend tens of billions of dollars for education, there is little to ensure that good teaching is rewarded and bad teaching is penalized. Higher costs are built into the current public teacher salary bill as an aging work-force is paid almost exclusively on the basis of the teacher's education and experience. As a result, the educational consumer and tax-payer face rising per student costs with no corresponding assurance of rising educational quality.

One of the major economic developments in Canada during the 1980s has been the emergence of a significantly higher unemployment rate in Canada than in the United States. By the end of 1985 the rate in the United States had dropped to a bit over 7 percent, almost identical to the rate at the peak of the previous business cycle expansion in mid-1981. In Canada, on the other hand, the rate was about 10 percent, well above the 7 percent in the first half of 1981. This difference in the unemployment rate was the greatest divergence since the labour force survey was initiated four decades ago.

The purpose of this study is to analyze the factual evidence on economic growth since 1973, the 1981-82 recession, and high unemployment in Canada compared to the United States, compared with the longer-term experience in both countries.