Matthew Lau: Rapid public-sector growth means flat living standards for us

financialpost.com:

Canada’s fourth-quarter GDP numbers were published last week, and while the economy barely dodged the technical definition of a recession, the figures again painted an ugly picture of Canadians’ economic well-being. Adjusted for inflation, GDP barely budged in Q4. Add the effect of population growth, and real GDP per capita declined for the sixth consecutive quarter. Relative to Q3:2015, the last quarter before the Trudeau Liberals took power, it is up just 0.8 per cent, versus 15.4 per cent in the United States. That constitutes a shocking relative decline in Canadians’ standard of living.

Even more alarming than the fact that Canada has seen essentially zero real per capita growth over more than eight years are the changes in various components of GDP. Increases to productivity, standards of living, and wages depend on capital investment by businesses, but the Trudeau government’s aggressive regulatory initiatives and tax-and-spend agenda have severely harmed Canada’s investment climate.

On a real per capita basis, business gross fixed capital formation was down 13.8 per cent from Q3:2015 to Q4:2023. By sector, business investment was down 14.9 per cent in residential structures, 17.6 per cent in machinery and equipment and 18.8 per cent in non-residential structures. Business investment in intellectual property did rise, but nowhere near enough to offset the declines in other categories. In fact, so weak has business investment been in Canada since 2015 that in addition to declining capital investment, the capital stock itself, adjusted for the number of workers, is falling.

If business investment is down so significantly, which categories of real GDP per capita have increased to make up the total 0.8 per cent change