Canadians’ real per capita incomes have stalled in the past five years, but that hasn’t been the case in other rich countries
By Jack Mintz
Last week, I wrote about Canada’s poor economic performance over the past five years compared to the United States and other industrialized countries. To recap, Canada’s standard of living has been becalmed, “as a painted ship upon a paint ocean.” Sure, we went through a bad year with the pandemic in 2020. So did other countries. Yet, we fell behind. Over the last five years, as our growth stalled, U.S. per capita GDP grew 9.3 per cent, the OECD average 5.6 per cent, resource-rich Australia 4.8 per cent and Ireland an astonishing 31 per cent.
According to IMF statistics, our share of world GDP (in purchasing-power-parity dollars), has fallen six per cent, from 1.44 per cent in 2018 to 1.36 per cent in 2023. We shouldn’t even be a G7 country anymore: in PPP dollars our economy is only the world’s 16th biggest, right behind Spain.
But that’s the past. What about the future? In 2021, the OECD projected that our economy would perform worse this decade than all other member countries, with per capita real GDP growing only 0.7 per cent annually — though at least that would be an improvement over the past five years. The big question is why Canada is at the bottom of the heap. There are several reasons:
• The demographic time bomb: Economic growth will be more challenging this decade as many boomers retire and begin supporting their consumption by cashing in pension and other assets. Many other high-income countries, no different than Canada, are also aging rapidly, with retirees rising from roughly 25 per cent of the working population in 2020 to 40 per cent in 2035. With fewer people working and saving, GDP per capita will naturally decline (even if GDP per worker rises). Canada traditionally has been able to attract younger immigrants to make up for the output loss but international markets for skilled labour are increasingly competitive as workers, including ones born in Canada, pick and choose the country they feel offers them the best opportunities.
• Indebtedness: With interest rates higher than they have been, indebtedness also hurts economic growth. To cope with higher payments on mortgages and consumer debt, households, corporations and governments will deleverage by consuming fewer goods and services. Canada’s governments may be carrying less debt than their U.S. and G7 counterparts, but Canadian households and corporations are carrying more — fully 216 per cent of GDP in 2022, compared to 186 in Japan, 153 in the U.S., 150 in the U.K., 127 in German and just 110 per cent in Italy. Only France, with private debts equal to 228 per cent of its GDP, will experience a greater debt drag on growth than we will.
• Shrinking world trade: Growing protectionism will especially hurt countries that rely, as we do, on trade as a source of economic growth. We currently export 33 per cent of GDP, primarily to the U.S. Geo-political tensions and decoupling from China will hit us harder than other places, like the U.S., where trade matters less.
• A costly energy transition: The extraordinary cost of building new transportation, heating and industrial energy systems over the next few years won’t realize benefits for decades, if at all. The highest value-added per working hour in 2022 was earned in non-conventional oil extraction at $997 — more than 16 times the average of all industries ($61) and almost five times more than in mining ($205). Shifting labour out of an activity where value-added is that high means GDP will surely fall.
Energy is our largest source of export earnings so any reduction in exports will push the Canadian dollar down. With the federal government hell-bent on stopping new fossil-fuel development, especially of liquified natural gas, we will spend the next couple of decades throwing away wealth that could provide income to Canadians and taxes for governments. Our ideologically driven energy transition will cause us to lag countries like the U.S., Norway and Australia, which continue to develop and export energy while also working on clean technologies.
New technologies: The coming decade does offer the growth-friendly promise of new technologies. AI, continuing digitization and any number of innovations we can’t anticipate will allow us to produce more with the resources we have. On the other hand, adopting new technologies requires investing in new capital. And this is where Canada is weak. Since 2018 Canadian corporate investment has been about 10 per cent of GDP — almost a fifth below the United States and the OECD in general. The OECD says our poor investment performance will cost us 0.4 percentage points in per capita GDP growth every year this decade, more than in any other OECD country.
Why is our standard of living slipping compared to other industrialized economies? Demographics aside, we impose higher barriers to economic growth than our major trading partners do, especially the U.S. Innovation continues to generate great opportunities for us but if business investment remains moribund, we will miss out on many of them. Forget identity politics — growth and investment are now our top priorities.
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Yaccarino had raised concerns among conservatives and free speech advocates for previously serving as chairwoman of a World Economic Forum taskforce and promoting DEI and the COVID shots.
X CEO, Linda Yaccarino, announced today that she is departing from her position at the social media giant.
“After two incredible years, I’ve decided to step down as CEO of 𝕏,” wrote Yaccarino on X.
“When Elon Musk and I first spoke of his vision for X, I knew it would be the opportunity of a lifetime to carry out the extraordinary mission of this company,” she continued. “I’m immensely grateful to him for entrusting me with the responsibility of protecting free speech, turning the company around, and transforming X into the Everything App.”
“I’m incredibly proud of the X team – the historic business turn around we have accomplished together has been nothing short of remarkable,” she said.
After two incredible years, I’ve decided to step down as CEO of 𝕏.
When @elonmusk and I first spoke of his vision for X, I knew it would be the opportunity of a lifetime to carry out the extraordinary mission of this company. I’m immensely grateful to him for entrusting me…
Musk hired Yaccarino in May 2023, seven months after his $44 billion purchase of the tech company, then known as “Twitter.”
At the time, Musk’s choice to take the helm at his newly acquired company raised eyebrows among conservative observers who had earlier rejoiced at the tech mogul’s intent to rescue free speech on the internet but now were troubled about the credentials of the digital platform’s new head.
Their concerns were not without good reason.
Yaccarino had previously served as chairwoman of the World Economic Forum’s “future of work” taskforce and sat on the globalist group’s “steering committee” for “media, entertainment, and culture industry.”
She had also boasted about her role as an early cheerleader for the untested COVID-19 jab.
As 2021–2022 Ad Council Chair, she “partnered with the business community, the White House, and government agencies to create a COVID-19 vaccination campaign, featuring Pope Francis and reaching over 200 million Americans,” according to her biography page at NBCUniversal, where she had been president before being lured to Twitter by Musk.
While at NBCUniversal, she also pushed discriminatory, equity-based hiring practices, based on “diversity” characteristics such as gender and race.
“At NBCU, she uses the power of media to advance equity and helps to launch DEI [Diversity, Equity, Inclusion]-focused initiatives,” recounted her online biography.
For the most part, over the last two years, Yaccarino’s performance at X allayed suspicions free speech activists at first harbored.
“Honestly, I was worried when she was hired but she didn’t burn down the house,” quipped popular conservative X account, @amuse.
Mike Benz, who serves as executive director of the Foundation For Freedom Online, a free speech watchdog organization dedicated to restoring the promise of a free and open internet, was far more effusive in his praise of Yaccarino.
“Linda stood up and fought for free speech during arguably its most acute crisis moment in world history when we were almost on the brink of losing it,” said Benz in an X post. “She stepped up for all of us in the face of what seemed like insurmountable pressure from governments, advertisers, boycotters, banking institutions, and astroturfed lynch mobs.”
Two recent events exemplify the fundamental irrationality that is Canada’s electric vehicle (EV) policy.
First, the Carney government re-committed to Justin Trudeau’s EV transition mandate that by 2035 all (that’s 100 per cent) of new car sales in Canada consist of “zero emission vehicles” including battery EVs, plug-in hybrid EVs and fuel-cell powered vehicles (which are virtually non-existent in today’s market). This policy has been a foolish idea since inception. The mass of car-buyers in Canada showed little desire to buy them in 2022, when the government announced the plan, and they still don’t want them.
Second, President Trump’s “Big Beautiful” budget bill has slashed taxpayer subsidies for buying new and used EVs, ended federal support for EV charging stations, and limited the ability of states to use fuel standards to force EVs onto the sales lot. Of course, Canada should not craft policy to simply match U.S. policy, but in light of policy changes south of the border Canadian policymakers would be wise to give their own EV policies a rethink.
And in this case, a rethink—that is, scrapping Ottawa’s mandate—would only benefit most Canadians. Indeed, most Canadians disapprove of the mandate; most do not want to buy EVs; most can’t afford to buy EVs (which are more expensive than traditional internal combustion vehicles and more expensive to insure and repair); and if they do manage to swing the cost of an EV, most will likely find it difficult to find public charging stations.
Also, consider this. Globally, the mining sector likely lacks the ability to keep up with the supply of metals needed to produce EVs and satisfy government mandates like we have in Canada, potentially further driving up production costs and ultimately sticker prices.
Finally, if you’re worried about losing the climate and environmental benefits of an EV transition, you should, well, not worry that much. The benefits of vehicle electrification for climate/environmental risk reduction have been oversold. In some circumstances EVs can help reduce GHG emissions—in others, they can make them worse. It depends on the fuel used to generate electricity used to charge them. And EVs have environmental negatives of their own—their fancy tires cause a lot of fine particulate pollution, one of the more harmful types of air pollution that can affect our health. And when they burst into flames (which they do with disturbing regularity) they spew toxic metals and plastics into the air with abandon.
So, to sum up in point form. Prime Minister Carney’s government has re-upped its commitment to the Trudeau-era 2035 EV mandate even while Canadians have shown for years that most don’t want to buy them. EVs don’t provide meaningful environmental benefits. They represent the worst of public policy (picking winning or losing technologies in mass markets). They are unjust (tax-robbing people who can’t afford them to subsidize those who can). And taxpayer-funded “investments” in EVs and EV-battery technology will likely be wasted in light of the diminishing U.S. market for Canadian EV tech.
If ever there was a policy so justifiably axed on its failed merits, it’s Ottawa’s EV mandate. Hopefully, the pragmatists we’ve heard much about since Carney’s election victory will acknowledge EV reality.
