Article content

Canada’s economic performance has fallen further behind that of the U.S. over the past quarter century, with the gap in GDP per person more than doubling and the Americans pulling ahead on incomes, employment, investment and productivity.

Sign In or Create an Account

or View more offersArticle content

That’s according to a new study published by the Fraser Institute, which found that, in 1999, inflation-adjusted GDP per person in Canada was $48,076, while in the U.S. it was $58,842. By 2024, GDP per person had grown to $83,286 in the U.S. compared to just $59,529 in Canada — meaning the gap had widened from $10,766 to $23,757 over 25 years.

Article contentWe apologize, but this video has failed to load.Try refreshing your browser, or
tap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, or
tap here to see other videos from our team.Article content

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article content

The study compared economic outcomes in the two countries by looking at measures including living standards, incomes, employment, investment, and productivity. In every category, Canada has fallen further behind over the first quarter of the century, it found.

Article contentArticle content

For example, in 2010 (the earliest year of comparable data), inflation-adjusted median employment income was $6,126 higher in the U.S. than in Canada. By 2024, that gap had increased to $8,663.

Article content

“When comparing the economic performance of Canada relative to the U.S. since the beginning of the 21st century, it’s abundantly clear that Canadian policymakers have failed to create an environment where we can prosper,” said Jake Fuss, director of fiscal studies at the Fraser Institute, in a news release.

Article content

He added that the ability to transform raw materials and other inputs into demanded goods and services increased by more than double the amount (26.7 per cent versus 67.9 per cent) in the U.S. compared to Canada, “which explains much of our languishing living standards.”

Article content

The Fraser Institute outlines three factors that explain the widening gap in economic performance between the two countries.

Article content

Story continues below

This advertisement has not loaded yet, but your article continues below.

Article contentArticle content

The first is a decline in private sector employment as a share of total employment in Canada. This decreased from 81.2 per cent to 78.5 per cent, meaning the government sector outgrew the private sector. The opposite occurred in the U.S., as private sector employment increased from 85.8 per cent of total employment to 86.5 per cent.

Article contentRead More

  1. Canadians are fed up of ‘paying more to receive less,’ majority think the government spends too much
  2. The 13 charts that prove the lost Liberal decade
  3. Story continues belowThis advertisement has not loaded yet, but your article continues below.

Article content

Meanwhile, labour productivity — a key driver of income growth — in the U.S. grew by 67.9 per cent between 1999 and 2025 compared to a 26.7 per cent increase in Canada during the same period.

Article content

Finally, business investment in Canada — which equips workers with the tools and technology they need to produce goods and services — dropped from nearly 90 cents per worker for every dollar invested in the U.S. to 54 cents between 2007 and 2024.

Article content

That said, the Fraser Institute study suggests that Canada’s trailing economic performance didn’t begin until 2014. Prior to this, Canada largely kept pace with, or in some cases exceeded, the U.S. across multiple measures, it said.

Article content

The think tank doesn’t look into the potential reasons for the change in 2014, but Grady Munro, senior policy analyst at the Fraser Institute and one of the study’s authors, offers some insight into the major factors that he says likely played a role.