Canada's Self-Inflicted Living Standards Gap with the US Doubles in One Decade

Canada's living standards gap with the US has more than doubled in just one decade, from $10,766 to $23,757. This is not due to external factors, but rather the country's own policies and actions. A new study by the Fraser Institute reveals that between 2014 and 2024, GDP per person grew 3.2 percent in Canada and 20.1 percent in the US.

The study points out that for the first 15 years of this century, Canada kept pace with the US, reaching 83.1 percent of US GDP per person by 2014. However, since then, Canada's economy has stagnated, collapsing to 71.5 percent of the US GDP per person.

The main culprit behind this decline is capital investment. Business investment per worker in Canada fell 4.9 percent between 2007 and 2024, while it rose 57.9 percent in the US. Canadian workers now receive only 54 cents for every dollar invested by American workers, with even less for machinery and equipment.

Ottawa's response to this erosion was an accounting trick: pumping up aggregate GDP through rapid population growth while GDP per person flatlined. This strategy produced headline growth numbers but hid a shrinking pie per Canadian.