While Canada’s economy has been hailed as a leader among G7 nations in terms of overall growth, a closer look at GDP per capita paints a different picture. GDP per capita, which measures economic output per person, has barely budged in Canada compared to other advanced economies.
The stark contrast is evident when examining GDP per capita growth over the past decade. From 2012 to 2022, Canada saw an anemic 4.3% increase, according to World Bank data. During that same period, the United States experienced a remarkably higher 47.4% rise in GDP per capita.
Dr. Sylvain Charlebois, a.k.a. The Food Processor, points out that the gap has widened by 106% since 2015.
Last year’s 4.9% GDP per capita growth in Canada may seem substantial, but it pales in comparison to the 8.7% increase in the US for 2022. Furthermore, those figures were inflated due to the rebound from pandemic-related constraints in 2021.
Experts point to Canada’s housing bubble as a major culprit behind the sluggish GDP per capita growth — surprise, surprise. A disproportionate amount of investment has poured into residential real estate rather than productive sectors like manufacturing. This excessive mortgage debt accumulation threatens to undermine future economic prosperity.
The Organization for Economic Co-operation and Development (OECD) previously warned that Canada’s housing debt addiction could leave it dead last in GDP per capita among advanced economies for at least 40 years.
With GDP per capita currently showing negative quarterly growth, concerns are mounting that Canada has failed to heed such warnings about its debt-driven housing risks.
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