Posthaste: Canada's standard of living on track for worst decline in 40 years
Measuring a country’s growth can be contentious.
Measure Canada’s gross domestic product by aggregate and it doesn’t look so bad, but measure it by person or per capita and it’s dismal.
For example, between 2000 and 2023 Canada had the second highest rate of aggregate GDP growth in the G7, but one of the lowest growth rates per person.
When a country has had a population surge as Canada has, economists say measuring by person gives a better picture of its standard of living, and according to a new study by Fraser Institute that standard is headed for its biggest decline in 40 years.
The study by Grady Munro, Jason Clemens, and Milagros Palacios looks at the three worst periods of decline and recovery of real GDP per person in the country since 1985. They are between 1989 and 1994, years that included a recession, between 2008 and 2011, the aftermath of the great financial crisis, and this last that began in 2019.
This latest period is unique because even though GDP per person recovered for one quarter in mid-2022, it immediately began to decline again, and by the end of 2023 was well below where it was in 2019.
“This lack of meaningful recovery suggests that since mid-2019, Canada has experienced one of the longest and deepest declines in real GDP per person since 1985,” said the study’s authors.
Between April of 2019 and the end of 2023, when the last data was available, inflation-adjusted per-person GDP fell 3 per cent from $59,905 to $58,111. That is surpassed only by the declines in 1989 to 1992, when GDP per person fell 5.3 per cent and in the financial crisis, when it fell 5.2 per cent, says the study.
The latest decline has lasted 18 quarters, making it the second longest in the past 40 years. Only the decline of
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