Posthaste: Canada's standard of living is falling behind the rest of the developed world
Good morning,
You might not know it but Canada has a growth problem.
What looks like a solid economic recovery from the pandemic actually masks an underperformance in standard of living that is among the worst of advanced economies, says a new report by TD Economics.
“Economic growth does not necessarily equate to economic prosperity,” said TD economist Marc Ercolao.
On the surface Canada’s economic growth looks healthy. “Supercharged” immigration and population growth helped drive a quick recovery in activity after the pandemic, particularly in consumption and the housing market.
According to Statistics Canada, our population is growing at a record pace, rising by 1,050,110 in 2022, the first time in Canadian history the population has grown by more than 1 million people in a single year.
“While aggregate GDP is one thing, standard-of-living is another, and when Canada’s economic performance is adjusted for the rising population count, it reveals a picture that leaves much to be desired,” said Ercolao.
On the world stage, Canada is one of the few advanced economies that has not recovered its pre-pandemic standard of living, measured by real gross domestic product per capita.
This measure has contracted over the past three quarters, and TD forecasts it will continue to shrink until the end of 2024. More alarming, the Organization for Economic Cooperation and Development predicts that Canada will place last among OECD members in real GDP per capita growth until 2060.
It wasn’t always so.
At the start of the 1980s Canada’s per capita GDP was almost US$4,000 above the average of advanced economies, but by 2000 this advantage had all but disappeared, said Ercolao. That year U.S. per capital GDP exceeded Canada’s by more than
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