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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The worst thing that can happen to a property owner isn’t a flood or a leaky foundation. It’s learning that you don’t own your property – that an Aboriginal band does. This summer’s Cowichan Tribes v. Canada decision presented property owners in Richmond B.C. with exactly that horrible reality, awarding Aboriginal
title to numerous properties, private and governmental, situated within a large portion of Richmond’s Fraser River riverfront area, to Vancouver Island’s
Cowichan Tribes. For more than 150 years, these properties had been owned privately or by the government. The Cowichan Tribes had never permanently lived
there.
But B.C. Supreme Court Justice Barbara Young ruled that because the lands had never been formally surrendered by the Cowichans to the Crown by treaty, (there
were no land-surrender treaties for most of B.C.), the first Crown grants to the first settlers were in effect null and void and thus all subsequent transfers down
the chain of title to the present owners were defective and invalid.
The court ordered negotiations to “reconcile” Cowichan Aboriginal title with the interests of the current owners and governments. The estimated value of the
property and government infrastructure at stake is $100 billion.
This ruling, together with previous Supreme Court of Canada rulings in favour of the concept of Aboriginal title, vapourizes more than 150 years of legitimate
ownership and more broadly, threatens every land title in most of the rest of B.C. and in any other area in Canada not subject to a clear Aboriginal land surrender
treaty.
Behind this decision lies a revolution – one being waged not in the streets but in the courts.
In recent years Canadian judges, inspired and led by the Supreme Court of Canada, have become increasingly activist in favour of Aboriginal rights, in effect
unilaterally amending our constitutional order, without public or legislative input, to invent the “consult and accommodate” obligation, decree Aboriginal title and grant Canadian Aboriginal rights to American Indians. No consideration of the separation of powers doctrine or the national interest has ever been evidenced by
the Court in this regard.
Following the Supreme Court’s lead, Canadian judges have increasingly embraced the rhetoric of Aboriginal activism over restrained, neutral language, thus
sacrificing their need to appear to be impartial at all times.
In the Cowichan case the judge refused to use the constitutional and statutory term “Indian,” calling it harmful, thereby substituting her discretion for that of our
legislatures. She thanked Aboriginal witnesses with the word “Huychq’u”, which she omitted to translate for the benefit of others reading her decision. She didn’t
thank any Crown witnesses.
What seems like courtesy in in fact part of a larger pattern: judges in Aboriginal rights cases appearing to adopt the idiom, symbolism and worldview of the
Aboriginal litigant. From eagle staffs in the courtroom, to required participation in sweat lodge ceremonies, as in the Supreme Court-approved Restoule decision,
Canada’s justice system has drifted from impartial adjudication toward the appearance of ritualized, Aboriginal-cause solidarity.
The pivot began with the Supreme Court’s 1997 Delgamuukw v. British Columbia decision, which first accepted Aboriginal “oral tradition” hearsay evidence. Chief
Justice Lamer candidly asked in effect, “How can Aboriginals otherwise prove their case?” And with that question centuries of evidentiary safeguards intended
to ensure reliability vanished.
In Cowichan Justice Young acknowledged that oral tradition hearsay can be “subjective” and is often “not focused on establishing objective truth”, yet she
based much of her ruling on precisely such “evidence”.
The result: inherently unreliable hearsay elevated to gospel, speculation hardened into Aboriginal title, catastrophe caused to Richmond private and government property owners, the entire land titles systems of Canadian non-treaty areas undermined, and Crown sovereignty, the fount and source of all real property rights generally, further undermined.
Peter Best is a retired lawyer living in Sudbury, Ontario.
Has the time come for America to seriously reassess its participation in and support for the United Nations (U.N.)?
It’s a question that some prominent people are asking this week after the increasingly woke and essentially useless globalist body attempted to sneak a global carbon tax in through the back door while no one was looking.
Except someone was looking, as it turns out. Republican Utah Sen. Mike Lee, who chairs the powerful Senate Energy and Natural Resources Committee and is part of the majority on both the Senate Judiciary and Senate Foreign Relations Committees, said in an X post Thursday evening that this latest bit of anti-American action “warrants our withdrawal from the UN.”
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Secretary of State Marco Rubio said in his own X post on the matter on Wednesday that the Trump administration “will not allow the UN to tax American citizens and companies. Under the leadership of POTUS (President Donald Trump), the U.S. will be a hard NO. We call on other nations to stand alongside the United States in defense of our citizens and sovereignty.”
On Friday afternoon, Mr. Rubio took to X again to announce the news that efforts by himself and others in the Trump administration succeeded in killing an effort to move the tax forward during a meeting in London. However, the proposal is not fully dead – a final vote on it was simply delayed for a year.
The issue at hand stems from an attempt by the International Maritime Organization (IMO) – an agency of the U.N. – to impose net-zero rules on fuels used for seaborne shipping operations. The Trump administration estimates the imposition of the new requirements will increase the cost of shipping goods by about 10%, thus creating yet another round of inflation hitting the poorest citizens the hardest thanks to the globalist obsession with the amount of plant food – carbon dioxide – in the atmosphere.
Known as the IMO Net-Zero Framework, the proposal claims it would effectively “zero out” emissions from the shipping industry by 2050.
The potential implications if the U.N. ultimately succeeds in implementing its own global carbon tax are obvious. If this unelected, unaccountable globalist body can levy a carbon tax on Americans, a concept that America’s own elected officials have steadfastly rejected across the terms of the last five U.S. presidents, what would then prevent it from imposing other kinds of taxes on the world to support its ideological goals?
President Trump’s opposition to exactly this kind of international intrusion into America’s domestic policy choices is the reason why he has twice won the presidency, each time de-committing the U.S. from the Paris Climate Accords.
It has become increasingly obvious in recent years that the central goal of the global climate alarm movement is to dramatically raise the cost of all kinds of energy in order to force the masses to live smaller, more restricted lives and make their behavior easier for authoritarian governments to control. This camel’s nose under the tent move by the U.N. to sneak a global carbon tax into reality is just the latest in a long parade of examples that serve as proof points for that thesis.
At some point, U.S. officials must seriously reassess the value proposition in continuing to spend billions of dollars each year supporting and hosting a globalist organization whose every action seems designed to inflict damage on our country and its people. Now would be a good time to do that, in fact.
David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.
