Folks, it’s time to talk about Canada’s gross domestic profit as it relates to you.
What happened: Canada’s per capita GDP (the country’s GDP divided by the population) fell for the second consecutive quarter to close out 2022. The drop, calculated by economist Theo Argitis as 0.7%, is one of the largest quarterly drops ever seen outside of a recession.
Why it matters: GDP per capita is a quick way to measure how the prosperity of a country and the well-being of individuals are trending—a precipitous dip is a worrying indicator of economic health. Plus, Canada is underperforming compared to other advanced economies.
This dip is particularly concerning because Canada’s population grew more than ever over the same period. Foreign migration accounted for ~96% of the one million newcomers last year, most of which were targeted for the express purpose of boosting the economy.
So why the slump? While, in theory, a surge in new workers should equal a surge in productivity, the reality is that many of the highly-skilled labourers Canada welcomed aren’t yet working the jobs they came here to do, thanks to Canada’s strict recertification rules.
- Those with medicine, dentistry, veterinary medicine, and optometry degrees are six times more likely to work in jobs unrelated to their training.
- Newcomers also have trouble making land in urban centres (where the high-paying jobs are) due to the high cost of living and a wildly unaffordable housing market.
Bottom line: “Canada’s population growth is masking deeper economic problems around productivity and competitiveness that continue to threaten our standard of living,” economist Theo Argitis wrote. Not exactly what we wanted to hear heading into the weekend.—QH