Ill fares the North. If you are Canadian, what follows will likely not be news to you; you are already living through this reality. If you do not live in Canada, and have happily lived your life without giving Canada much thought, the plea for your time and attention is a simple one: what has happened here is happening everywhere, to some degree – we simply got there quicker.
As with every Western nation at the moment, and perhaps more than most, Canada is riven with political and cultural divides, but from the coasts to the interior, the large metropolises to the small towns, we are united in a collective economic suffering. The “cost of living,” the combined burdens of food, housing, and other necessary expenses like electricity and gasoline, has risen dramatically in a very short span of time, pauperizing many Canadians and dooming others to lives of constant precarity.
Never in my lifetime has conversation with Canadians converged so reliably on a single topic, the high cost of modern living, nor can I recall a time when pessimism so pervaded the national mood. It is visible in the polls: the ruling Liberal party, in power since 2015, continues to plummet in the polls, even among the young, formerly their most reliable defenders, while the leader of the Official Opposition, Pierre Poilievre of the Conservative Party, is poised to stroll into power in the next federal election, scheduled for October of 2025.
Unfortunately, it seems unlikely a simple changing of the guard will remedy Canada’s woes. Structural problems, long left unacknowledged and unaddressed, coupled with an identity crisis that has called Confederation itself into question, loom beneath the surface, deranging our politics and undermining our ability to unite behind a common vision for the future.
Though what follows will focus on distinctly Canadian issues, readers in the United States, France, Great Britain and elsewhere are sure to recognize, if only in nascent form, similar challenges in their own countries. Canada’s present may be your future, so take a lesson from our pains, observe where these trajectories lead, and adjust accordingly. Canadians, on the other hand, finally shocked out of our complacency by the unpleasant realities we now face, must not squander the moment: the future health and prosperity of our country, indeed the entire Canadian experiment, depends on what we do from here.
Our most immediate problems are economic in nature, and thankfully these are also the easiest to talk about. The latest jobs report, given for December 2023, is illustrative: Canada added 100 new jobs (no, I’m not omitting a zero) nationwide, just as the United States announced the creation of 216,000 new jobs in the same month. Even this paltry performance obscures a darker reality, as a close inspection of that same jobs report reveals that our net gain of 100 jobs came at the expense of 23,500 full-time positions in exchange for 23,600 part-time positions. Statistics Canada’s official numbers reveal a staggering 48% increase in the number of Canadians working for ride-sharing services from 2022, which goes a long way towards explaining why our net gain in jobs, or our year-on-year increases in national GDP, do not translate into higher living standards for Canadians.
If the short-term outlook is bad, the long-term outlook is bleak. In 2021, the OECD published a paper projecting the future fiscal performance of its 38 member states. Entitled “The Long Game,” the paper extrapolated from various economic metrics to determine how each country’s economy would likely fare from now until the year 2060. What are Canada’s prospects? In the metric of per capita GDP, perhaps the single best indicator of the economic wellbeing of individual citizens, the paper projected growth of 0.7% per annum until 2030 and 0.8% per annum until 2060, a prediction that would rank Canada last among OECD nations for each of the next three decades.
The OECD paper cites declining productivity as a central cause of Canada’s listless economic performance, which should provoke our puzzlement: how is a country regularly ranked among the best educated in the entire world, whose citizens work only slightly fewer hours each year than the famously busy American workforce, becoming less productive? In a report prepared late last year entitled “Canada’s Perennial Productivity Puzzle,” BMO Chief Economist Douglas Porter pointed out that Canada’s labour productivity has declined about 0.3% per year for the past five years, even as America’s labour productivity has grown 1.7% per year, which places Canada in the company of such economic underperformers as Italy, Spain and Turkey.
This productivity decline isn’t experienced by the average Canadian worker as a reduction in hours worked or an increase in vacation days, but it is reflected in their GDP per capita, which roughly tracked America’s until the last decade, when a yawning gap began to emerge:
Declining productivity leading to stagnant wages or lacklustre job growth is bad enough by itself, but it now comes at a time of sharply increasing costs for unavoidable expenditures like housing and groceries. Canada’s Food Price Report, conducted by four Canadian universities to assess food prices and project future trends, found average food prices increased 11% between September of 2022 and September of 2023, adding more than $1,000 to the annual cost of groceries for a family of four.
Rent followed a similar trajectory, increasing an average of nearly 12% across the country between 2021 and 2022. In Canada’s hottest real estate markets, Vancouver and Toronto, the average cost of renting a one-bedroom apartment rose to over $3,000 and $2,600, respectively. Both the cost of rent and the cost of food have increased at more than twice the rate of wage growth, creating record numbers of homeless Canadians and record numbers of Canadians reliant on food banks, while forcing more Canadians to borrow to survive: Canadian consumer debt now tops $2.4 trillion dollars.
In short, this is not an economy “working for Canadians,” but an economy “decaying at an alarming rate,” as one economist put it. Or, as phrased by Le Devoir, Quebec’s preeminent French-language newspaper, we are witnessing an “unprecedented decline in living standards,” squeezing Canadians from two sides: declining wages and ever-increasing costs. These are not conditions suitable for saving or paying down debts, nor does such economic uncertainty lend itself to reaching major financial milestones like taking on a mortgage or having a child. The metaphor offered to me again and again, by friends and acquaintances and strangers complaining about this new reality, is that of the hamster wheel: no amount of hard work seems to generate forward momentum. The joy that should accompany a raise or promotion sours when the numbers are crunched and the combination of high taxes and high costs erodes the ostensible gains; others, even less fortunate, watch their margins grow thinner and thinner each year as costs reliably rise but earnings do not.
As painful as the above problems are, however, they do not represent the totality of Canada’s current plight, nor can they be adequately addressed without broaching topics Canadians are much less eager to talk about. In the second part of this series, we will take a closer look at the decline in Canada’s infrastructure, from crumbling roads and bridges and inadequate housing to the alarming erosion of its public health services.