The economic performance of the Liberal government stands out. But not in a good way.
I recently wrote about Canada’s stagnating per capita GDP, and how this is the biggest crisis facing our nation. The column was generally well-received, aside from some Liberal supporters who – unsurprisingly – weren’t a big fan of it. Many of the criticisms from Liberal supporters centered around the idea that Canada is supposedly doing just fine, or that our per capita GDP performance is no different than it was under the Harper Conservatives.
So, I thought it would be good to put together a comparison of Canada’s per capita GDP growth during the Harper era and the Trudeau era.
(Note, the data below is from the Economic Research Division of the Federal Reserve Bank of St. Louis)
Change in Canada’s per capita GDP
From 2006 to 2015, Canada’s per capita GDP measured in 2010 U.S. Dollars increased from $41,646 to $43,596.
From 2016 to 2022, Canada’s per capita GDP measured in 2010 U.S. Dollars increased from $43,536 to $44,910.
Thus, the 2006-2015 change in Canada’s per capita GDP was $1,950.
Meanwhile the change in Canada’s per capita from 2016-2022 was $1,374.
Per capita GDP change in the Harper era: $1,950
Per capita GDP change in the Trudeau era: $1,374
Change in United States per capita GDP
Now, let’s take a look at the United States over that same time period:
From 2006 to 2015, U.S. per capita GDP went from $53,738 to $56,762.
From 2016 to 2022, U.S. per capita GDP went from $57,292 to $62,866.
Thus, U.S. per capita GDP grew by $3,024 during the time in which Stephen Harper was in power in Canada. Meanwhile, it grew $5,574 during the time in which Justin Trudeau has been in power in Canada.
Harper era Canadian per capita GDP gain: $1,950 vs $3,024 in the U.S.
Trudeau era Canadian per capita GDP gain: $1,374 vs $5,574 in the U.S.
Why mention this?
Because it tells us two important things.
First, given our close ties to the United States, you would expect our per capita GDP growth to increase as U.S. per capita growth increases. Yet, despite the strength of U.S. growth, growth in Canada has slowed in the Trudeau era.
Second, the gap between Canada and the United States is increasing. Our per capita GDP grew about 65% as fast as in the U.S. during the Harper era. However, our per capita GDP has grown only 25% as fast as in the Trudeau era.
This means that current federal policies are not only failing to capitalize on U.S. growth, but are actively holding our country back from the upward trajectory of our friends to the south.
Objective and subjective
The objective evidence makes it clear that Canada’s per capita GDP growth is worse under the Trudeau government than it was under the Harper government. And a subjective look at the situation makes it look even worse.
Both Harper & Trudeau faced a significant crisis that damaged economic growth. Harper faced the Great Recession, whereas Trudeau faced the Global Pandemic.
However, while the United States and other peer nations have already recovered their pre-pandemic per capita GDP, Canada has not done so. And that’s despite truly immense levels of money creation and federal spending. In fact, Canada spent and borrowed more – on a per capita basis – than most other countries, only to end up with worse results.
Additionally, growth in the Harper era was stronger than the Trudeau era despite the Conservatives restraining federal spending & reigning in federal hiring in order to get back to a balanced budget, while Trudeau continues to spend at a rapid clip while expanding the federal public service. This largely discredits Justin Trudeau’s ‘government spending-centric’ approach to economic growth.
Final takeaways
Objectively, the policies of the Harper era were better at raising our standard of living than the policies of the Trudeau era.
Subjectively, the Trudeau record looks even worse when we consider how much more we are spending, and how well the United States is doing.
Liberal partisans and Liberal MPs should consider the meaning of this. If they continue to double down on their current tax and spend policies, they will be consigning Canada to more stagnation and more debt.
And if the Liberals try to run on their ‘standout’ economic record, they may find that it doesn’t standout quite how they thought.
Spencer Fernando
