Canadian standard of living is declining, per the National Bank of Canada Financial

Canadian standard of living is declining, per the National Bank of Canada Financial.


Canada’s real gross domestic product (GDP) has stagnated at the same level as seven years ago, indicating a concerning trend.

Real GDP per capita, which factors in inflation and population growth, is typically seen as a positive indicator of economic health. However, when a country's population grows faster than its economic output, it can signal inefficiency. More people consuming without a proportional increase in production can lead to a decline in overall quality of life, suggesting a regression in progress.

Canada appears to be approaching a lost decade, as its real GDP per capita has remained stagnant over the past seven years while the United States has seen steady growth in this metric.

NBF chief economist Stéfane Marion highlights the importance of productivity, citing Nobel Laureate Paul Krugman's statement that "Productivity isn’t everything, but, in the long run, it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker."

Marion also mentions Canada's GDP per capita purchasing power parity (PPP), which has fallen to 76% of that of Americans according to the World Bank. This indicates a significant decline in Canada's relative purchasing power compared to the US.

While there has been some improvement in productivity in Canada, it has not been sufficient to reverse the overall trend. Marion notes that 2023 marked the third consecutive year of decline in GDP per capita, the worst sequence in at least 41 years.