Canada’s Competition Problem

Too many people in this country are afraid to compete, and would rather the government keep everyone at a lower level. This is a key cause of our distorted and increasingly moribund economy.

Canada has a competition problem.

Not too much, but too little.

Competitive drive is a key factor in the success of civilizations and economies, as the willingness to compete in the market leads to innovation and rising productivity.

Productivity often sounds like some sort of boring term, yet increasing productivity is the most profound thing we can do to improve our lives.

It’s no coincidence that the world’s most productive economies also become the most advanced and creative societies, as productivity raises people above desperate attempts to simply survive, and enables the long-term planning, thinking, and investment that generates further growth.

Competition is essential to this process, since it incentivizes people to provide better services to others, and find ways to produce more efficiently.

We can best discern how productive an economy is relative to other economies by looking at GDP per capita. It’s not perfect – as hours worked can also increase per capita GDP – but on a broad scale it gives us a good idea of much economic value is being generated per person, and whether people are getting richer or poorer.

Poorer & poorer

With that in mind, the reality is that Canadians are getting poorer.

That’s not an opinion, it’s a fact.

“In 2012, Canada’s per capita GDP was $52,669 USD.

In 2020, Canada’s per capita GDP was $43,241 USD.”

Some will say this is all due to covid, yet that is not the case:

In that same 2012-2020 timeframe, US per capita GDP has gone from $51,602 USD to $63,543 USD.

Indeed, one of the most interesting comparisons between economic growth in Canada and the US during the Trump Administration is that the US managed to outpace Canada in both GDP growth percentage and per capita growth.

According to Statista, the US economy grew 11.76% in that time frame, while Canada’s grew 7.59%.

Notably however, Canada’s immigration rate was far higher than that in the US as a percentage of population. This means Canada’s growth was largely due simply to a higher population, while growth in the US demonstrated actual productivity increases.

A way to think about this is to imagine that Canada let in 35 million people in a single year.

Our GDP would certainly surge, but the country would be completely overwhelmed, our social systems would fall apart, there would be severe shortages everywhere, and the average person would be far poorer and worse off.

Sure, we would have a higher total GDP due to a higher population, but the per capita GDP would collapse.

What does all of this have to do with competition?

Well, if a country doesn’t have a competitive attitude, and if people increasingly expect the government to do everything for them, then economic ‘growth’ can only be generated through deceptive means.

Inflation and population growth can make an economy look bigger, but it’s not the same as actual productivity growth.

Government restrictions & subsidies

As Canada remains one of the most locked-down nations, much of our ‘economic activity’ consists of governments shutting down businesses, and then giving those businesses money.

The money often doesn’t compensate businesses for their full losses.

Further, even if a business is fully compensated for the loss associated with lockdowns, there is still a huge drop in economic activity.

The government is printing money and then giving it out, in lieu of a business actually offering a service to paying customers.

It’s equivalent to paying someone to dig a ditch and then fill it up again. Nothing of value has been generated.

Even before covid, many businesses in this country – particularly the largest ones – were highly dependent on government subsidies.

From supply management, our socialized healthcare system, our heavily concentrated telecom sector, and more, Canada is a country where we seem to prefer protecting a few big businesses rather than subjecting those businesses to the ruthless competition of the market.

And, we haven’t even mentioned the energy sector.

A massive generator of wealth, the Canadian energy sector is being strangled by the federal government. This will further reduce Canada’s per capita GDP and leave our country worse off. The impact is multi-faceted, and one thing that is often not discussed is that the weakening of our energy sector not only makes Canadians poorer, but also forces us to purchase more energy from foreign countries – which adds additional costs in many cases.

A nation with a more competitive mindset would see our energy sector as a tremendous blessing, and would seek to maximize our production and profits, realizing that the benefits are immense. In Canada, the sector is instead used as a political punching bag and is demonized by those in power.

Fear-based mindset and aversion to competition

If there was any doubt that Canada’s ‘niceness’ was covering up something worse, the pandemic has removed that doubt.

Being nice can often be a cover for weakness and fear, and Canada has indeed turned out to be an incredibly fear-driven place.

Fear has turned many people into authoritarians, seeking draconian restrictions and cheering on the demonization of their fellow citizens.

That same fear is behind Canada’s increasing failure to compete and generate productivity growth, as many would prefer the government give them money than to earn it in the market.

Just look at how many people are constantly demanding that government ‘do something’ about every problem, rather than come up with creative ways to improve their own situation or voluntarily work with others to improve things.

Broken healthcare system

Nothing exemplifies Canada’s competition problem more than our healthcare system.

Canada’s system is among the most socialist and state-run on Earth.

While comparisons are made with the UK NHS, the UK has many private hospitals and a large independent healthcare sector.

Much of Europe also has private healthcare, alongside public systems.

Yet, mention the word ‘private’ in relation to healthcare in Canada, and many people panic.

Often, many Canadians seem to think that the Canadian system and the US system are the only two possible options for healthcare on the entire planet, closing their minds to the many alternatives that exist.

The breaking of our healthcare system during the covid crisis, with politicians using the weakness of the socialist healthcare system as the pretext for taking away many rights and freedoms, demonstrates with unfortunate clarity that our system lacks the capacity, creativity, innovation, and competitiveness to get the job done.

It’s even more absurd when you realize how much we pay in taxes for such a failing system.

Embrace competition, let go of fear

The longer Canada remains locked in a fear-based mindset, the more we will continue to fall behind other countries and watch our standard of living decline.

We must embrace competition, toughen up our attitude, and let go of the obsession with fear that politicians are all too glad to exploit.

Spencer Fernando


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