Business
Economic progress stalling for Canada and other G7 countries

From the Fraser Institute
By Jake Fuss
For decades, Canada and other countries in the G7 have been known as the economic powerhouses of the world. They generally have had the biggest economies and the most prosperous countries. But in recent years, poor government policy across the G7 has contributed to slowing economic growth and near-stagnant living standards.
Simply put, the Group of Seven countries—Canada, France, Germany, Italy, Japan, the United Kingdom and the United States—have become complacent. Rather than build off past economic success by employing small governments that are limited and efficient, these countries have largely pursued policies that increase or maintain high taxes on families and businesses, increase regulation and grow government spending.
Canada is a prime example. As multiple levels of government have turned on the spending taps to expand programs or implement new ones, the size of total government has surged ever higher. Unsurprisingly, Canada’s general government spending as a share of GDP has risen from 39.3 per cent in 2007 to 42.2 per cent in 2022.
At the same time, federal and provincial governments have increased taxes on professionals, businessowners and entrepreneurs to the point where the country’s top combined marginal tax rate is now the fifth-highest among OECD countries. New regulations such as Bill C-69, which instituted a complex and burdensome assessment process for major infrastructure projects and Bill C-48, which prohibits producers from shipping oil or natural gas from British Columbia’s northern coast, have also made it difficult to conduct business.
The results of poor government policy in Canada and other G7 countries have not been pretty.
Productivity, which is typically defined as economic output per hour of work, is a crucial determinant of overall economic growth and living standards in a country. Over the most recent 10-year period of available data (2013 to 2022), productivity growth has been meagre at best. Annual productivity growth equaled 0.9 per cent for the G7 on average over this period, which means the average rate of growth during the two previous decades (1.6 per cent) has essentially been chopped in half. For some countries such as Canada, productivity has grown even slower than the paltry G7 average.
Since productivity has grown at a snail’s pace, citizens are now experiencing stalled improvement in living standards. Gross domestic product (GDP) per person, a common indicator of living standards, grew annually (inflation-adjusted) by an anemic 0.7 per cent in Canada from 2013 to 2022 and only slightly better across the G7 at 1.3 per cent. This should raise alarm bells for policymakers.
A skeptic might suggest this is merely a global phenomenon. But other countries have fared much better. Two European countries, Ireland and Estonia, have seen a far more significant improvement than G7 countries in both productivity and per-person GDP.
From 2013 to 2022, Estonia’s annual productivity has grown more than twice as fast (1.9 per cent) as the G7 countries (0.9 per cent). Productivity in Ireland has grown at a rapid annual pace of 5.9 per cent, more than six times faster than the G7.
A similar story occurs when examining improvements in living standards. Estonians enjoyed average per-person GDP growth of 2.8 per cent from 2013 to 2022—more than double the G7. Meanwhile, Ireland’s per-person GDP has surged by 7.9 per cent annually over the 10-year period. To put this in perspective, living standards for the Irish grew 10 times faster than for Canadians.
But this should come as no surprise. Governments in Ireland and Estonia are smaller than the G7 average and impose lower taxes on individuals and businesses. In 2019, general government spending as a percentage of GDP averaged 44.0 per cent for G7 countries. Spending for governments in both Estonia and Ireland were well below this benchmark.
Moreover, the business tax rate averaged 27.2 per cent for G7 countries in 2023 compared to lower rates in Ireland (12.5 per cent) and Estonia (20.0 per cent). For personal income taxes, Estonia’s top marginal tax rate (20.0 per cent) is significantly below the G7 average of 49.7 per cent. Ireland’s top marginal tax rate is below the G7 average as well.
Economic progress has largely stalled for Canada and other G7 countries. The status quo of government policy is simply untenable.
Author:
Business
Cuba has lost 24% of it’s population to emigration in the last 4 years

MxM News
Quick Hit:
A new study finds Cuba has lost nearly a quarter of its population since 2020, driven by economic collapse and a mass emigration wave unseen outside of war zones. The country’s population now stands at just over 8 million, down from nearly 10 million.
Key Details:
- Independent study estimates Cuba’s population at 8.02 million—down 24% in four years.
- Over 545,000 Cubans left the island in 2024 alone—double the official government figure.
- Demographer warns the crisis mirrors depopulation seen only in wartime, calling it a “systemic collapse.”
Diving Deeper:
Cuba is undergoing a staggering demographic collapse, losing nearly one in four residents over the past four years, according to a new study by economist and demographer Juan Carlos Albizu-Campos. The report estimates that by the end of 2024, Cuba’s population will stand at just over 8 million people—down from nearly 10 million—a 24% drop that Albizu-Campos says is comparable only to what is seen in war-torn nations.
The study, accessed by the Spanish news agency EFE, points to mass emigration as the primary driver. In 2024 alone, 545,011 Cubans are believed to have left the island. That number is more than double what the regime officially acknowledges, as Cuba’s government only counts those heading to the United States, ignoring large flows to destinations like Mexico, Spain, Serbia, and Uruguay.
Albizu-Campos describes the trend as “demographic emptying,” driven by what he calls a “quasi-permanent polycrisis” in Cuba—an interwoven web of political repression, economic freefall, and social decay. For years, Cubans have faced food and medicine shortages, blackout-plagued days, fuel scarcity, soaring inflation, and a broken currency system. The result has been not just migration, but a desperate stampede for the exits.
Yet, the regime continues to minimize the damage. Official figures from the National Office of Statistics and Information (ONEI) put Cuba’s population at just over 10 million in 2023. However, even those numbers acknowledge a shrinking population and the lowest birth rate in decades—confirming the crisis, if not its full scale.
Cuba hasn’t held a census since 2012. The last scheduled one in 2022 has been repeatedly delayed, allegedly due to lack of resources. Experts doubt that any new attempt will be transparent or complete.
Albizu-Campos warns that the government’s refusal to confront the reality of the collapse is obstructing any chance at solutions. More than just a demographic issue, the study describes Cuba’s situation as a “systemic crisis.”
“Havana (Cuba, February 2023)” by Bruno Rijsman licensed under CC BY-SA 2.0 DEED.
Business
Tariff-driven increase of U.S. manufacturing investment would face dearth of workers

From the Fraser Institute
Since 2015, the number of American manufacturing jobs has actually risen modestly. However, as a share of total U.S. employment, manufacturing has dropped from 30 per cent in the 1970s to around 8 per cent in 2024.
Donald Trump has long been convinced that the United States must revitalize its manufacturing sector, having—unwisely, in his view—allowed other countries to sell all manner of foreign-produced manufactured goods in the giant American market. As president, he’s moved quickly to shift the U.S. away from its previous embrace of liberal trade and open markets as cornerstones of its approach to international economic policy —wielding tariffs as his key policy instrument. Since taking office barely two months ago, President Trump has implemented a series of tariff hikes aimed at China and foreign producers of steel and aluminum—important categories of traded manufactured goods—and threatened to impose steep tariffs on most U.S. imports from Canada, Mexico and the European Union. In addition, he’s pledged to levy separate tariffs on imports of automobiles, semi-conductors, lumber, and pharmaceuticals, among other manufactured goods.
In the third week of March, the White House issued a flurry of news releases touting the administration’s commitment to “position the U.S. as a global superpower in manufacturing” and listing substantial new investments planned by multinational enterprises involved in manufacturing. Some of these appear to contemplate relocating manufacturing production in other jurisdictions to the U.S., while others promise new “greenfield” investments in a variety of manufacturing industries.
President Trump’s intense focus on manufacturing is shared by a large slice of America’s political class, spanning both of the main political parties. Yet American manufacturing has hardly withered away in the last few decades. The value of U.S. manufacturing “output” has continued to climb, reaching almost $3 trillion last year (equal to 10 per cent of total GDP). The U.S. still accounts for 15 per cent of global manufacturing production, measured in value-added terms. In fact, among the 10 largest manufacturing countries, it ranks second in manufacturing value-added on a per-capita basis. True, China has become the world’s biggest manufacturing country, representing about 30 per cent of global output. And the heavy reliance of Western economies on China in some segments of manufacturing does give rise to legitimate national security concerns. But the bulk of international trade in manufactured products does not involve goods or technologies that are particularly critical to national security, even if President Trump claims otherwise. Moreover, in the case of the U.S., a majority of two-way trade in manufacturing still takes place with other advanced Western economies (and Mexico).
In the U.S. political arena, much of the debate over manufacturing centres on jobs. And there’s no doubt that employment in the sector has fallen markedly over time, particularly from the early 1990s to the mid-2010s (see table below). Since 2015, the number of American manufacturing jobs has actually risen modestly. However, as a share of total U.S. employment, manufacturing has dropped from 30 per cent in the 1970s to around 8 per cent in 2024.
U.S. Manufacturing Employment, Select Years (000)* | |
---|---|
1990 | 17,395 |
2005 | 14,189 |
2010 | 14,444 |
2015 | 12,333 |
2022 | 12,889 |
2024 | 12,760 |
*December for each year shown. Source: U.S. Bureau of Labor Statistics |
Economists who have studied the trend conclude that the main factors behind the decline of manufacturing employment include continuous automation, significant gains in productivity across much of the sector, and shifts in aggregate demand and consumption away from goods and toward services. Trade policy has also played a part, notably China’s entry into the World Trade Organization (WTO) in 2001 and the subsequent dramatic expansion of its role in global manufacturing supply chains.
Contrary to what President Trump suggests, manufacturing’s shrinking place in the overall economy is not a uniquely American phenomenon. As Harvard economist Robert Lawrence recently observed “the employment share of manufacturing is declining in mature economies regardless of their overall industrial policy approaches. The trend is apparent both in economies that have adopted free-market policies… and in those with interventionist policies… All of the evidence points to deep and powerful forces that drive the long-term decline in manufacturing’s share of jobs and GDP as countries become richer.”
This brings us back to the president’s seeming determination to rapidly ramp up manufacturing investment and production as a core element of his “America First” program. An important issue overlooked by the administration is where to find the workers to staff a resurgent U.S. manufacturing sector. For while manufacturing has become a notably “capital-intensive” part of the U.S. economy, workers are still needed. And today, it’s hard to see where they will be found. This is especially true given the Trump administration’s well-advertised skepticism about the benefits of immigration.
According to the U.S. Bureau of Labor Statistics, the current unemployment rate across America’s manufacturing industries collectively stands at a record low 2.9 per cent, well below the economy-wide rate of 4.5 per cent. In a recent survey by the National Association of Manufacturers, almost 70 per cent of American manufacturers cited the inability to attract and retain qualified employees as the number one barrier to business growth. A cursory look at the leading industry trade journals confirms that skill and talent shortages remain persistent in many parts of U.S. manufacturing—and that shortages are destined to get worse amid the expected significant jump in manufacturing investment being sought by the Trump administration.
As often seems to be the case with Trump’s stated policy objectives, the math surrounding his manufacturing agenda doesn’t add up. Manufacturing in America is in far better shape than the president acknowledges. And a tariff-driven avalanche of manufacturing investment—should one occur—will soon find the sector reeling from an unprecedented human resource crisis.
Jock Finlayson
Senior Fellow, Fraser Institut
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