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Canada living standards falling behind rest of developed world

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From the Fraser Institute

By Alex Whalen, Milagros Palacios, and Lawrence Schembri

On Canada Day, Deputy Prime Minister Chrystia Freeland proclaimed that “Canada is the best country in the world,” yet Canadians are getting poorer relative to their peers in many other countries and our living standards are falling. This trend is expected to continue well into the future, unless our policymakers make significant changes.

Economists often measure living standards by real gross domestic product (GDP) per person—in other words, the inflation-adjusted monetary value of what a country produces in goods and services divided by its population.

As noted in a new study published by the Fraser Institute, from 2002 to 2014, Canada’s GDP per-person growth roughly kept pace with the rest of the OECD. But from 2014 to 2022, the latest year of available comparable data, Canada’s annual average growth rate declined sharply, ranking third-lowest among 30 countries over the period. Consequently, in dollar terms, Canada’s GDP per person increased only $1,325 during this time period, compared to the OECD average increase of $5,070 (all values in 2015 U.S. dollars).

Moreover, between 2014 and 2022, Canada’s GDP per person declined from 80.4 per cent of the U.S. level to 72.3 per cent, and lost substantial ground to key allies and trading partners such as the United Kingdom, New Zealand and Australia.

And according to OECD projections, Canada will have the lowest projected average annual growth rate of GDP per person (at 0.78 per cent) from 2030 to 2060 when our GDP per person will be below the OECD average by $8,617. This represents a swing of more than $11,000 from where it was in 2002.

Why is this happening?

Several reasons, including historically weak business investment over the past decade, a substantial shift in the composition of permanent and temporary immigrants towards those with less education and fewer skills, and subdued technological innovation and adoption. These factors have combined to produce very low or negative labour productivity growth due to weak growth in the education and skills of the average worker and the amount of capital (namely plant, machinery and equipment) per worker.

While most advanced countries are experiencing similar trends, the situation in Canada is among the worst. Consequently, our relative decline in living standards grows exponentially because Canada’s poor performance compounds over time.

To break out of this rut and prevent this further decline in Canada’s living standards relative to our peers, policymakers must enact comprehensive and bold policy changes to encourage business investment and innovation, promote worker education and training, and achieve better immigration outcomes where more is not always better.

As a starting point, governments should improve the climate for business investment and for investment in education and training by streamlining regulation and major project approvals and reducing current and expected future tax burdens on firms and workers.

Levels of government debt and debt interest costs are approaching thresholds of unsustainability not seen since the 1990s. Governments, including the federal government, must exercise spending restraint to put their finances on a more sustainable path to mitigate the “crowding out” effects of government spending and debt in private markets, and thereby promote private investment. In addition, policies that liberalise intra-provincial and international trade and foster more competition, especially in key industries (e.g. transportation, communication, finance) would help boost investment, productivity and living standards.

Because GDP per person is so closely connected to incomes and living standards, Canada’s decline relative to our peer countries on this key metric should concern all Canadians. Given Canada’s projected continued poor performance, our country needs a major series of policy reforms to avoid further declines in living standards.

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The great policy challenge for governments in Canada in 2026

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From the Fraser Institute

By Ben Eisen and Jake Fuss

According to a recent study, living standards in Canada have declined over the past five years. And the country’s economic growth has been “ugly.” Crucially, all 10 provinces are experiencing this economic stagnation—there are no exceptions to Canada’s “ugly” growth record. In 2026, reversing this trend should be the top priority for the Carney government and provincial governments across the country.

Indeed, demographic and economic data across the country tell a remarkably similar story over the past five years. While there has been some overall economic growth in almost every province, in many cases provincial populations, fuelled by record-high levels of immigration, have grown almost as quickly. Although the total amount of economic production and income has increased from coast to coast, there are more people to divide that income between. Therefore, after we account for inflation and population growth, the data show Canadians are not better off than they were before.

Let’s dive into the numbers (adjusted for inflation) for each province. In British Columbia, the economy has grown by 13.7 per cent over the past five years but the population has grown by 11.0 per cent, which means the vast majority of the increase in the size of the economy is likely due to population growth—not improvements in productivity or living standards. In fact, per-person GDP, a key indicator of living standards, averaged only 0.5 per cent per year over the last five years, which is a miserable result by historic standards.

A similar story holds in other provinces. Prince Edward Island, Nova Scotia, Quebec and Saskatchewan all experienced some economic growth over the past five years but their populations grew at almost exactly the same rate. As a result, living standards have barely budged. In the remaining provinces (Newfoundland and Labrador, New Brunswick, Ontario, Manitoba and Alberta), population growth has outstripped economic growth, which means that even though the economy grew, living standards actually declined.

This coast-to-coast stagnation of living standards is unique in Canadian history. Historically, there’s usually variation in economic performance across the country—when one region struggles, better performance elsewhere helps drive national economic growth. For example, in the early 2010s while the Ontario and Quebec economies recovered slowly from the 2008/09 recession, Alberta and other resource-rich provinces experienced much stronger growth. Over the past five years, however, there has not been a “good news” story anywhere in the country when it comes to per-person economic growth and living standards.

In reality, Canada’s recent record-high levels of immigration and population growth have helped mask the country’s economic weakness. With more people to buy and sell goods and services, the overall economy is growing but living standards have barely budged. To craft policies to help raise living standards for Canadian families, policymakers in Ottawa and every provincial capital should remove regulatory barriers, reduce taxes and responsibly manage government finances. This is the great policy challenge for governments across the country in 2026 and beyond.

Ben Eisen

Senior Fellow, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute
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Business

Land use will be British Columbia’s biggest issue in 2026

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By Resource Works

Tariffs may fade. The collision between reconciliation, property rights, and investment will not.

British Columbia will talk about Donald Trump’s tariffs in 2026, and it will keep grinding through affordability. But the issue that will decide whether the province can build, invest, and govern is land use.

The warning signs were there in 2024. Land based industries still generate 12 per cent of B.C.’s GDP, and the province controls more than 90 per cent of the land base, and land policy was already being remade through opaque processes, including government to government tables. When rules for access to land feel unsettled, money flows slow into a trickle.

The Cowichan ruling sends shockwaves

In August 2025, the Cowichan ruling turned that unease into a live wire. The court recognized the Cowichan’s Aboriginal title over roughly 800 acres within Richmond, including lands held by governments and unnamed third parties. It found that grants of fee simple and other interests unjustifiably infringed that title, and declared certain Canada and Richmond titles and interests “defective and invalid,” with those invalidity declarations suspended for 18 months to give governments time to make arrangements.

The reaction has been split. Supporters see a reminder that constitutional rights do not evaporate because land changed hands. Critics see a precedent that leaves private owners exposed, especially because unnamed owners in the claim area were not parties to the case and did not receive formal notice. Even the idea of “coexistence” has become contentious, because both Aboriginal title and fee simple convey exclusive rights to decide land use and capture benefits.

Market chill sets in

McLTAikins translated the risk into advice that landowners and lenders can act on: registered ownership is not immune from constitutional scrutiny, and the land title system cannot cure a constitutional defect where Aboriginal title is established. Their explanation of fee simple reads less like theory than a due diligence checklist that now reaches beyond the registry.

By December, the market was answering. National Post columnist Adam Pankratz reported that an industrial landowner within the Cowichan title area lost a lender and a prospective tenant after a $35 million construction loan was pulled. He also described a separate Richmond hotel deal where a buyer withdrew after citing precedent risk, even though the hotel was not within the declared title lands. His case that uncertainty is already changing behaviour is laid out in Montrose.

Caroline Elliott captured how quickly court language moved into daily life after a City Richmond letter warned some owners that their title might be compromised. Whatever one thinks of that wording, it pushed land law out of the courtroom and into the mortgage conversation.

Mining and exploration stall

The same fault line runs through the critical minerals push. A new mineral claims regime now requires consultation before claims are approved, and critics argue it slows early stage exploration and forces prospectors to reveal targets before they can secure rights. Pankratz made that critique earlier, in his argument about mineral staking.

Resource Works, summarising AME feedback on Mineral Tenure Act modernisation, reported that 69.5 per cent of respondents lacked confidence in proposed changes, and that more than three quarters reported increased uncertainty about doing business in B.C. The theme is not anti consultation. It is that process, capacity, and timelines decide whether consultation produces partnership or paralysis.

Layered on top is the widening fight over UNDRIP implementation and DRIPA. Geoffrey Moyse, KC, called for repeal in a Northern Beat essay on DRIPA, arguing that Section 35 already provides the constitutional framework and that trying to operationalise UNDRIP invites litigation and uncertainty.

Tariffs and housing will still dominate headlines. But they are downstream of land. Until B.C. offers a stable bargain over who can do what, where, and on what foundation, every other promise will be hostage to the same uncertainty. For a province still built on land based wealth, Resource Works argues in its institutional history that the resource economy cannot be separated from land rules. In 2026, that is the main stage.

Resource Works News

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