In addition to Canada’s strong resurgence in economic growth during the second quarter, the country may have also experienced a key turning point in an area that has long vexed its policymakers: labor productivity.

According to Statistics Canada (StatCan), the labor productivity of Canadian businesses jumped 1.8 percent in the second quarter, exceeding the consensus forecast by two-tenths of a percentage point.

But more important than that, this performance was the highest quarter-over-quarter rise in 16 years. And on a year-over-year basis, labor productivity was up 3.3 percent.

Still, it’s too soon to tell whether this is the start of a new trend toward higher productivity. Over the trailing five-year period, for instance, labor productivity has grown at an average rate of just 0.32 percent per quarter.

And prior to this latest result, over the trailing-year period that ended March 31, labor productivity increased at an average rate of 0.55 percent per quarter. Sure, that’s a modest improvement, though it’s still underwhelming overall.

But this is hardly a new problem. In fact, when it comes to labor productivity, Canada’s been a longtime laggard compared to its developed-world peers.

According to the Organization for Economic Cooperation and Development (OECD), from 2001 through 2009, labor productivity grew just 0.7 percent annually, which puts Canada in the bottom quartile of that entity’s member countries.

The boost to efficiency that typically comes from business investment seems to be the main culprit here. According to Deloitte, a major accounting firm and consultancy, Canadian companies invest less than half of what US firms spend on research and development.

And on a per-worker basis, expenditures on machinery and equipment are just 65 percent of what US firms spend, while Canadian companies invest just 53 percent as much as their US peers on information and communication technology.

Even the rock star of central banking, former Bank of Canada (BoC) Governor Mark Carney has previously described Canada’s past performance on the productivity front as “abysmal.”

Of course, that hasn’t stopped our average stock recommendation from producing enviable returns. So it’s easy to imagine what a boost to labor productivity will do for companies’ bottom lines–and ultimately our Portfolios.

And in keeping with the spirit of friendly rivalry between the US and our neighbor to the north, we’ll note that Canada’s growth in labor productivity has outpaced the US in five of the past eight quarters, with three consecutive quarters of outperformance most recently.

So what changed during the second quarter? Interestingly, according to StatCan, even as labor productivity surged, the number of hours worked fell by 0.8 percent from the prior quarter.

Meanwhile, labor costs per unit of production increase by 0.3 percent, which was just one-third the rate of the first quarter.

According to The Wall Street Journal, Douglas Porter, the chief economist of BMO Capital Markets, believes the sudden rebound in productivity could be partly the result of the economy shifting from its dependence on debt-burdened consumers and real estate to rising exports and business investment.

Those just happen to be two of the BoC’s fixations since Stephen Poloz took the helm of the central bank last year, so they’re foremost in economists’ minds (and ours as well).

Mr. Porter notes that growth resulting from real estate and consumer spending tends to create jobs, though it doesn’t do all that much for productivity. By contrast, greater export activity and business investment leads to higher productivity, but doesn’t translate right away into job growth.

On the other hand, TD Economics believes the gain in productivity could be more cyclical in nature, perhaps reflecting the disconnect between the country’s dismal employment market and growing economy. If hiring picks up, then productivity could moderate.

Regardless, we like to look at which sectors had the greatest gains in productivity for possible investment themes. On that score, the retail trade, mining and oil and gas extraction, manufacturing, and wholesale trade sectors were the largest contributors to the rise in overall productivity during the quarter.