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Historic decline in Canadian living standards continues into 2024

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3 minute read

From the Fraser Institute

By Grady Munro and Jake Fuss

Statistics Canada on Friday released its estimate of gross domestic product (GDP) for the first quarter of 2024, and once again while the Canadian economy is technically growing, the living standards of Canadians themselves are continuing to fall.

The new numbers reveal that inflation-adjusted GDP—the final value of all goods and services produced in the economy and the most widely used measure of overall economic activity—grew by 0.4 per cent in the first quarter of 2024. But at the same time, inflation-adjusted GDP per person—a broad measure of individual living standards—actually fell 0.2 per cent during the first quarter of 2024, down to $58,028.

This apparent disconnect between overall economic growth and individual living standards is the result of Canada’s changing population. The reason the economy is growing while living standards are falling is because the rate of economic growth is not fast enough to account for all the new people in Canada (whether through birth or immigration). During the first three months of 2024, the economy grew by 0.4 per cent while the population grew by 0.6 per cent.

A single quarter of declining per-person GDP is not particularly concerning in and of itself, but unfortunately for Canadians, these new data are simply the latest evidence of a prolonged decline in individual living standards.

A recent study measured inflation-adjusted per-person GDP over the last 40 years (1985 to 2023) and found that from the middle of 2019 (well before COVID) to the end of 2023, per-person GDP fell from $59,905 to $58,134. This 3.0 per cent drop over four and a half years was the second-longest and third-deepest decline in living standards over the entire period—only exceeded in both length and depth by the more than five-year decline that began mid-1989 and lasted until living standards recovered in the third quarter of 1994, and which saw inflation-adjusted GDP per person fall by 5.3 per cent.

If we factor in the new data for the beginning of 2024, we see that the current ongoing decline is worsening. Inflation-adjusted per-person GDP now sits 3.1 per cent below the level it was in mid-2019, and the decline is approaching five-years in length. In other words, Canada is approaching the milestone of experiencing the longest decline in individual living standards of the last 40 years.

Weak economic growth combined with a fast-growing population over the last several years have resulted in Canadians experiencing a marked and prolonged decrease in living standards. With new data showing no sign of improvement, Canadians and governments across the country should realize that the status quo cannot continue.

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Business

Saskatchewan becomes first Canadian province to fully eliminate carbon tax

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From LifeSiteNews

By Clare Marie Merkowsky

Saskatchewan has become the first Canadian province to free itself entirely of the carbon tax.

On March 27, Saskatchewan Premier Scott Moe announced the removal of the provincial industrial carbon tax beginning April 1, boosting the province’s industry and making Saskatchewan the first carbon tax free province.

“The immediate effect is the removal of the carbon tax on your Sask Power bills, saving Saskatchewan families and small businesses hundreds of dollars a year. And in the longer term, it will reduce the cost of other consumer products that have the industrial carbon tax built right into their price,” said Moe.

Under Moe’s direction, Saskatchewan has dropped the industrial carbon tax which he says will allow Saskatchewan to thrive under a “tariff environment.”

“I would hope that all of the parties running in the federal election would agree with those objectives and allow the provinces to regulate in this area without imposing the federal backstop,” he continued.

The removal of the tax is estimated to save Saskatchewan residents up to 18 cents a liter in gas prices.

The removal of the tax will take place on April 1, the same day the consumer carbon tax will reduce to 0 percent under Prime Minister Mark Carney’s direction. Notably, Carney did not scrap the carbon tax legislation: he just reduced its current rate to zero. This means it could come back at any time.

Furthermore, while Carney has dropped the consumer carbon tax, he has previously revealed that he wishes to implement a corporation carbon tax, the effects of which many argued would trickle down to all Canadians.

The Saskatchewan Association of Rural Municipalities (SARM) celebrated Moe’s move, noting that the carbon tax was especially difficult on farmers.

“It puts our farming community and our business people in rural municipalities at a competitive disadvantage, having to pay this and compete on the world stage,” he continued.

“We’ve got a carbon tax on power — and that’s going to be gone now — and propane and natural gas and we use them more and more every year, with grain drying and different things in our farming operations,” he explained.

“I know most producers that have grain drying systems have three-phase power. If they haven’t got natural gas, they have propane to fire those dryers. And that cost goes on and on at a high level, and it’s made us more noncompetitive on a world stage,” Huber decalred.

The carbon tax is wildly unpopular and blamed for the rising cost of living throughout Canada. Currently, Canadians living in provinces under the federal carbon pricing scheme pay $80 per tonne.

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2025 Federal Election

Fight against carbon taxes not over yet

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By Franco Terrazzano 

As the federal government removes the consumer carbon tax, the Canadian Taxpayers Federation is calling on all party leaders to oppose all carbon taxes, including the hidden tax on business.

“Canadians fought hard to force Ottawa to back down on its consumer carbon tax and now the fight moves to stopping the hidden carbon tax on business,” said Franco Terrazzano, CTF Federal Director. “Canadians can’t afford a carbon tax on business that pushes up prices at the gas station and makes it harder for our businesses to compete while they’re already struggling with a trade war.”

Today, the federal government cut the consumer carbon tax rate to $0. This will reduce taxes by about 17 cents per litre of gasoline, 21 cents per litre of diesel and 15 cents per cubic metre of natural gas.

The federal government still imposes an industrial carbon tax on oil and gas, steel and fertilizer businesses, among others.

During the Liberal Party leadership race, Prime Minister Mark Carney said he would “improve and tighten” the industrial carbon tax and “extend the framework to 2035.”

Just 12 per cent of Canadians believe businesses pay most of the cost of the industrial carbon tax, according to a Leger poll commissioned by the CTF. Meanwhile, 70 per cent said businesses would pass most or some carbon tax costs on to consumers.

Conservative Party Leader Pierre Poilievre said he will “repeal the entire carbon tax law, including the tax on Canadian businesses and industries.”

“Carbon taxes on refineries make gas more expensive, carbon taxes on utilities make home heating more expensive and carbon taxes on fertilizer plants increase costs for farmers and that makes groceries more expensive,” Terrazzano said. “Canadians know Poilievre will end all carbon taxes and Canadians know Carney’s carbon tax costs won’t be zero.

“Carney owes Canadians a clear answer: How much will your carbon tax cost?”

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