Donald Trump’s bombastic style has enraged many Canadians and is admittedly hard for nearly anyone to stomach, but the need for someone to undo years of Democratic Party waste and corruption is undeniable. Those actions, along with expected tax cuts and aggressive deregulation focused especially on increasing energy production, will help unleash the economy of a country that already far outperforms ours. Canadians need to work past their distaste for Trump and recognize what is coming.
Gross domestic product (GDP) per capita is a measure of a country’s economic output per person. It is therefore a revealing indicator of a nation’s economic strength, overall well-being and the living standards of its citizenry. In 2014, the year before the Justin Trudeau government was first elected, America’s GDP per capita was US$55,605 versus US$44,710 for Canadians, according to this recent Fraser Institute research paper – a difference of 24 percent. While that was already quite serious, the gap has widened year-by-year since then and, the study projects, by 2030 will become a yawning economic chasm of some 40 percent. Already today, the average worker in the most prosperous Canadian province earns less than his or her counterpart in the least productive U.S. state.
The U.S. President’s continuing rhetoric about making Canada the 51st State is certainly annoying, but one can’t deny that his apparent underlying message – that Canada is performing far below its potential and needs to get serious or its very existence may be threatened – carries a serious point. In 2022, Canada’s per capita GDP for the first time actually fell below the average among the 38 OECD member nations – a group that includes Greece, Portugal, Colombia and Turkey – a trend that the same Fraser Institute study expects to worsen continually for the next 35 years.
How does Canada’s GDP per capita compare to that of the United States?
It shouldn’t and didn’t need to be this way. Canada is one of the world’s most naturally well-endowed nations. Alberta and B.C. contain enormous oil and natural gas resources (just over a week ago, coincidentally, the Alberta Energy Regulator announced that the province’s natural gas reserves are six times higher than previously estimated, while also casually mentioning that the province holds nearly 7 billion barrels more recoverable crude oil than previously thought). Our mighty rivers provide much of our electricity. The vast Canadian Shield covering most of the eastern provinces holds enormous mineral wealth. There’s no doubt that, on a per-capita basis, these natural resources are superior to those of our American neighbour’s. Our workforce is as well if not better-educated than America’s.
So why the vast productivity gap? There’s a woefully long list of answers to that question, and they all involve self-inflicted wounds. In my opinion, the most important of these are:
The Trudeau Government’s Green Fanaticism – Carbon taxes on motor fuels aimed at motivating the switch from internal combustion-engined cars and light trucks to electric vehicles (EVs), combined with a mandate for so-called clean fuel refining standards, drove up costs for private motorists and commercial transporters alike. EV purchase subsidies along with a pricey taxpayer-funded charging network inflicted more economic damage. Heating costs zoomed, farmers faced rising fuel and fertilizer expenses, and small through large businesses were hit by unrecoverable cost increases.
The “No More Pipelines” Law – Achieving the Trudeau government’s aim of “net zero” emissions relies largely on throttling the oil and natural gas sector, which in turn has been largely facilitated by increasing to prohibitive levels the regulatory burden on the construction of major new pipelines. Bill C-69, the Impact Assessment Act and Canadian Energy Regulator Act, was introduced in 2018 by Minister of Environment and Climate Change Steven Guilbeault, a former Greenpeace Activist who once climbed to the top of Toronto’s CN Tower to unfurl a banner that read “Canada and Bush – Climate Killers” (the latter a reference to then-U.S. President George W. Bush). In late 2023, after an arduous four-year court challenge led by the Government of Alberta, the bill was ruled “largely unconstitutional” and struck down by the Supreme Court of Canada – but Guilbeault and Trudeau then made only the most token of changes to their illegal law, keeping any new pipeline proposals in limbo.
As of 2023, Canadian businesses had invested a staggering US$672 billion in the United States, while overall American business investment in Canada had fallen to US$452 billion. This is clear evidence that Canadian and American corporations see the U.S. as a more attractive place to invest.
Weak Business Investment per Worker – Capital investment by companies is a key driver of living standards and income gains for working Canadians. But as with per capita GDP, average capital investment per worker has not only been growing slower than in the U.S., it has actually been shrinking in absolute terms. Another study by the Fraser Institute found that this key metric had declined from $18,363 per worker in 2014 to only $14,687 in 2021. In the same period, capital investment per American worker rose from the Canadian dollar equivalent of $23,333 to $26,751 – opening up a gap of 82 percent between the two countries.
Why is Canada’s economy underperforming compared to the United States?
This is a combined recipe for stagnation, foregone opportunities, inefficiency and overall economic failure.
The report’s ominous conclusion: “Having investment per worker much lower in Canada tells us that businesses see less opportunity in Canada.” But it’s not as if Canadian companies, banks and investment funds have stopped investing altogether. So where is that Canadian money going? The answer is alarming: as of 2023, Canadian businesses had invested a staggering US$672 billion in the United States, while overall American business investment in Canada had fallen to US$452 billion. This is clear evidence that Canadian and American corporations see the U.S. as a more attractive place to invest.
Canada’s Unionized Monopolies – Thirty percent of Canadian workers are unionized, three times the rate of American workers. Person-days-not-worked, a measure of union militancy, skyrocketed from 1.9 million in 2022 to 6.6 million in 2023. Strikes in Canada have become more intractable since the Trudeau government introduced legislation forbidding any federally regulated corporation hit by a strike to hire temporary replacement workers (unjustifiably vilified by unions and their enablers as “scabs”). Last year, for example, our two national railways both shut down. Then came strikes at the Port of Vancouver and the Port of Montreal, disrupting a combined $2 billion per day in shipments. As Christmas approached, Canadians were hit by the Canada Post strike. It’s hard to imagine such a shutdown of the U.S. Postal Service being tolerated by the current Administration.
Diversity, Equity and Inclusion (DEI)-based Hiring, and Environmental, Social and Governance (ESG) Investing – Worsening Canada’s economic impotence are DEI policies compelling businesses to hire by race, gender or other categories of “disadvantage” rather than capability, and ESG policies requiring proposed projects to achieve “net zero emissions” in order to qualify for financing. This is a combined recipe for stagnation, foregone opportunities, inefficiency and overall economic failure.
What is the current state of Canada’s national debt?
Doubling the National Debt – Nine-plus years of Liberal misrule have not only crippled our economy but doubled our national debt from $612.4 billion at the fiscal year-end of March 31, 2015, to $1.24 trillion at March 31, 2024 – equivalent to about 42 percent of Canada’s annual GDP. It will require major expenditure cuts to prevent a crisis such as Canada faced in the mid-1990s when rising government spending led to a dangerously high debt-to-GDP ratio and a crisis in the Canadian dollar. But while the U.S. is now aggressively tackling its own spending and deficit problems, our Liberals continue to spend and borrow wildly, continually blowing through their own projections, as the $62 billion deficit incurred in fiscal 2024 showed.
The foregoing are grievous self-inflicted wounds that Canadians have been forced to suffer throughout the Trudeau era. And they are far from a complete list. Just the other day an acquaintance e-mailed an informal tally of Trudeau’s damaging, corrupt or costly acts, or other indicators of Canada’s sad decline – nearly 80 separate items.
While there has been massive hype and a certain amount of hope surrounding Trudeau’s anointed successor, Mark Carney, don’t be fooled: he is cut from the same fanatical net-zero cloth as Trudeau. As Kevin O’Leary put it the other day, “He is Trudeau 2.0.” Personally, I regard Carney as even more dangerous. Well-groomed, superficially sophisticated, often fairly smooth in comportment, and constantly referring to his self-described expertise in calmly managing financial crises, Carney in fact occupies an even higher level in the eco-extremist global hierarchy than Trudeau.
Rather than reducing spending, Carney would create a fiscal mirage by separating operating from capital expenditures – and then balance only the former category while piling up further debt via the latter. If voters fall for Carney’s shell game, Canada is heading toward Third World economic status.
Not only was Carney the UN’s “Special Envoy on Climate Action and Finance”, he founded the UN-backed Glasgow Financial Alliance for Net Zero (GFANZ), dedicated to withholding equity and bank financing from oil and natural gas companies – which happen to form the most productive and important economic sector of the country Carney now governs. (He appears to have skedaddled from that organization in January after it came under U.S. Congressional investigation for violating antitrust laws.) But that is no aberration; in his 2021 book Value(s): Building a Better World for All, Carney envisions the elimination of all fossil fuels, writing, “Firms that align their business models with the transition to a net-zero carbon economy will be rewarded handsomely; those that fail to adapt will cease to exist.”
Carney in fact loved Trudeau’s consumer carbon tax, but he came to realize that wooing Canadian voters required he hide it from view. There already is a significant carbon tax on large industrial emitters. Carney’s solution? Move the carbon tax entirely “upstream” onto producers – not just big industries but all the farmers, manufacturers and other businesses of every kind that make up our national economic base. Imagine what that would do to our already woeful economic indicators.
And although a few days ago Carney did announce he was “eliminating” the consumer carbon tax, the Conservatives quickly pointed out that since the carbon tax is an actual law, Carney has no unilateral power to end it. He can, arguably, direct the government to stop collecting it – or “instruct”, as the strange document he released along with his announcement put it – but the carbon tax law itself remains on the books. That means it could be reimposed at any time, like the day after the next federal election if the Liberals won it. Canadians should be guarded. As Elizabeth (Liz) Truss, former Prime Minister of the UK, recently urged, “I strongly recommend not backing Mark Carney for his policies on net zero. It was disastrous for Britain. It would be disastrous for Canada.”
And what does Carney plan to do about our out-of-control deficit? Use accounting sleight-of-hand, of course. Rather than reducing spending, he would create a fiscal mirage by separating operating from capital expenditures – and then balance only the former category while piling up further debt via the latter. If voters fall for Carney’s shell game, Canada is heading toward Third World economic status. The only “good” news will be that Trump would probably not even take such a national trainwreck as a 51st U.S. state!
Canadians have a critical choice to make: re-elect a Liberal government that continues the same quasi-socialist, impoverishing, anti-business, net-zero, carbon-taxing path that is now well into its tenth long year, or elect a Conservative government focused on unleashing the talents and energy of Canadian workers and entrepreneurs to regain the ground we have lost and then begin to realize the great potential of our nation. We need a Pierre Poilievre-led Conservative government.
Gwyn Morgan is a retired business leader who was a director of five global corporations.
Source of main image: Shutterstock.
