St. John's 
Canada’s living standards declined between 2020 and 2024, with Gross Domestic Product (GDP) per person falling by 2 per cent—the steepest five-year drop since the Great Depression, according to a study released by the Fraser Institute.
The decline came despite overall GDP growth of 1.5 per cent over the same period, making Canada an outlier among advanced economies. Other G7 members, excluding Germany, along with countries such as Australia and New Zealand, have returned to or surpassed pre-pandemic GDP per capita levels.
Lawrence Schembri, senior fellow at the Fraser Institute and co-author of the study Canada’s “Ugly” Growth Experience, 2020–2024, said Canada’s decline was the worst among OECD countries and signals weak prospects for future gains in living standards.
The report points to a sharp fall in Canada’s capital-to-labour ratio as the key reason for the decline, leaving workers with less equipment and reducing productivity. Weak business investment and rapid employment growth from historically high immigration levels were identified as major contributors.
Business investment was hindered by higher regulatory costs, increased taxation, and deficit spending, while immigration policies expanded the labour supply and lowered the cost of labour, discouraging investment in productivity improvements.
The Organisation for Economic Co-operation and Development (OECD) had forecast in 2021 that Canada would post the lowest per-capita GDP growth among its 38 member nations through 2060. It projected growth of 0.7 per cent annually between 2020 and 2030 and 0.8 per cent from 2030 to 2060, compared with OECD averages of 1.3 and 1.1 per cent respectively.
Actual performance fell short even of those modest projections. From 2020 to 2024, Canada’s per-capita GDP decreased by 2 per cent, whereas the OECD had predicted growth of 3.2 per cent. The gap of 5.2 percentage points highlights the depth of the country’s underperformance.
The study further notes that if current trends persist, Canada’s per-capita GDP—once above the OECD average by US$3,141 in 2002—will fall to US$8,617 below the average by 2060, a relative decline of nearly US$12,000 in constant 2015 dollars.
Schembri said reversing the trajectory would require “sweeping and substantial policy changes” from federal and provincial governments to improve investment conditions and strengthen productivity growth.
