In the 1980s, Japan was viewed as a prominent global powerhouse, with its economy projected to surpass that of the United States by the year 2000. However, this optimism came crashing down in the 1990s when the Japanese stock market collapsed and economic growth stalled, leading to what became known as the “lost decade.” Unfortunately, Japan has never fully recovered from the promising outlook of the 1980s. Now, it seems that Canada is facing a similar fate.
To understand the lack of progress since 2015, let’s take a quick review. Back in 2014, an article published by the New York Times proclaimed that the Canadian middle class was possibly the richest in the world. Canada was praised for its abundant natural resources, strong immigration system, rising economic standards, stable government financing, and declining crime rates. At that time, Canada was the envy of the world, much like Japan in the 1980s.
However, since then, Canada’s per capita GDP has come to a complete standstill. According to the World Bank, Canadian real GDP per capita has only risen by 2.9 percent in the past eight years, equivalent to a meager 0.37 percent per year. In contrast, the United States has witnessed a 12.65 percent increase in real GDP per capita during the same period, averaging 1.58 percent per year. This means that in 2014, the GDP per capita in the US was 22 percent higher than in Canada, and by 2022, it had grown to be 35 percent higher. The US per capita economy has grown a staggering 4.3 times faster than Canada’s. Additionally, real wages in Canada have remained stagnant, and recent years have even seen a decline as inflation rises while wages remain the same. According to the OECD, Canada’s prospects for per capita growth in the coming decades are among the worst in the developed world.
The decline of the auto sector is another troubling revelation. In 2014, Canada produced 2.39 million vehicles, but by 2022, production fell by 49 percent to only 1.23 million vehicles. During the same period, American car production only decreased by 14 percent, from 11.66 million to 10.01 million. This decline in the auto sector has had a significant impact on the Canadian economy.
Furthermore, there has been a substantial increase in government debt. In 2015, Canada’s federal government debt accounted for only 35 percent of GDP, making it the envy of other developed nations. However, since then, it has risen to $1.26 trillion, or 59 percent of GDP. The actual level of debt is less concerning than its impact on inflation, particularly asset inflation and housing. Despite rising consumer prices, home prices in Canada have skyrocketed by 87.6 percent, making it increasingly difficult for young people to afford homeownership.
In addition to these economic setbacks, the number of federal civil servants in Canada has increased by 38.9 percent, reaching 357,247 from 257,034. The crime rate has also surged, with violent crime increasing by 40 percent across the country since 2014.
From an environmental standpoint, Canada has made no progress either. Despite claims that putting a price on pollution is an effective strategy, greenhouse gas emissions in Canada have actually risen by 5 percent in the last eight years. Interestingly, in the United States, where there is no carbon tax, emissions have decreased by 7 percent. This paints a grim picture of a slow-growing economy with declining living standards and rising carbon dioxide levels.
With two years remaining in the current federal government’s term, there is little discussion of policies that can help lift Canada out of its economic stagnation. While it is essential for the government to address income inequality, it should also focus on facilitating economic growth.
Overall, this decade has been marked by significant economic failures for Canada. The hope lies in the next decade, where we can strive for a recovery. It is crucial to note that the views expressed in this article are the opinions of the author and may not necessarily reflect those of The Epoch Times.