David Williams is vice-president of policy at the Business Council of British Columbia. Jock Finlayson is the council’s executive vice-president and chief policy officer.
It’s been about 12 years since the peak of the last business cycle in 2007. And as the 43rd federal Parliament sits for its first session, it’s a good time to reflect on how Canada’s economy has performed compared with other advanced countries over the current business cycle. Has Canada “kept up with the Joneses?”
Unfortunately, the answer is no. Canadians have seen a substantial deterioration in living standards relative to peer countries since 2007, according to Organization for Economic Cooperation and Development data. This is primarily because other countries have increased their productivity by more than Canada.
Canada’s peer group – “the Joneses” – includes the other Group of Seven countries, namely the United States, France, Germany, Italy, Japan and Britain. Australia and New Zealand are added because they have resource-based economies like Canada with similar institutions and well-educated work forces. Finally, we can also compare Canada to the average performances of the OECD, the G7 and the Euro area.
Germany, France, New Zealand, Australia and, on average, the Euro area, G7 and OECD have all increased GDP per person relative to U.S. levels since 2007. In contrast, Britain, Japan, Italy and Canada have lost ground to the U.S., with Canada’s decline being the steepest.
Canada and Australia, for example, had identical GDP per person in 2007, at 83 per cent of U.S. levels, while Germany’s was lower at 77 per cent.