According to a recent report by the Fraser Institute the standard of living of the average Canadian declined over the 2020-to-2024 period as Gross Domestic Product (GDP) per person decreased by 2.0 per cent, the worst five-year decline since the Great Depression.

And the report’s authors say the decline in the Canadian living standard took place despite aggregate GDP growth of 1.5 per cent over the period.

Titled Canada’s Ugly Growth Experience, 2020- 2024 the report cites the main reason for the poor performance is that Canada’s capital-to-labour ratio declined sharply. In other words, the average worker in Canada had less machinery and equipment to work with, which, in turn, lowered productivity and the ability to transform raw materials, ideas, and other inputs into goods and services.

It concludes that decline was caused by two related factors: weak growth in business investment and the rapid increase in employment driven by historically unprecedented levels of inward migration.

The Fraser Institute suggests the outlook for growth in living standards in Canada over the medium term is bleak and dramatic changes in policies, particularly in Ottawa, are required to reverse the country’s markedly poor economic performance.