Canada’s per-person GDP growing at slowest rate since the Great Depression

Weak growth in Canada has persisted for a decade, with per capita real gross domestic product posting its smallest gain in nearly a century. Canada’s economy has grown significantly slower than that of the United States, suggesting that the origins of Canada’s growth crisis are domestic. Moreover, slower growth in Canada has originated mostly in declining business investment and exports, the sectors of the economy that embed innovative technologies and reflect the competitiveness of Canadian businesses.

This paper looks at the broad reasons for the loss of dynamism in the Canadian economy, focusing on the erosion of the values that cultivate innovation and entrepreneurship. It begins with a reminder of the benefits of economic growth and how novel sustained growth is to the modern world. Growth is neither automatic nor well understood by economists, despite widespread claims that sustaining growth is easy to achieve by adopting a few simplistic policies. Canada cannot rectify its poor record on growth by continuing its exclusive focus on such formulaic policy making. Canada has adopted many of the policies economists recommend to boost growth, including high levels of immigration and education, lavish government support for research and development, and free trade deals with all the G7 nations, but slow growth has become more entrenched.

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