The finance minister is correct that Canada’s economy performs well compared to the rest of the G7. But there’s more to the numbers.
But there’s a serious problem with these measures — they fail to account for population growth rates in each country and therefore don’t measure whether individuals are actually better off.
So, to more accurately measure Canada’s economic performance relative to other countries, economists use GDP per person, which accounts for differing population growth rates. This measure is a much better indicator of individual incomes and living standards.
When Freeland boasts about aggregate GDP numbers — while ignoring how historic levels of population growth fuelled by record-high immigration inflate the numbers — she’s misleading Canadians.
In reality, Canadian living standards are falling behind the rest of the developed world, and are expected to fall further behind in years to come.
Jake Fuss and Grady Munro are economists at the Fraser Institute.