Despite turning in solid headline growth in recent years, Canada has lagged behind the U.S. and other advanced economies in terms of standard of living performance (or real GDP per capita).
This underperformance accelerated after the 2014-15 oil price shock and has continued in the wake of the pandemic. What’s more, little turnaround appears to be on the horizon.
There may be a tendency to pin the blame for Canada’s sagging per-capita showing on the country’s rapidly-growing population base given that it has inflated the denominator of the calculation. However, at the crux of the problem is insufficient growth in the numerator, which in turn is tied to longstanding productivity issues.
Regionally, commodity-based economies (Alberta, Saskatchewan, and Newfoundland & Labrador) continue to record the highest per-capita GDP levels, but their status as leaders has come under some pressure over the past decade. Post-pandemic, only British Columbia and PEI have managed to recover back to 2019 GDP per capita levels.