After a long slog, Canada’s economy has finally returned to where it was before the pandemic. The same can’t be said for Canadians.
This week Statistics Canada released its monthly gauge of economic growth, for November, showing inflation-adjusted gross domestic product crept 0.2 per cent above its February, 2020, level.
However, the story is different when population growth is factored in. Canada’s real GDP per capita, a measure of economic output per person, has yet to make back the ground lost because of COVID-19. As a measure of Canada’s standard of living, the continued drag on per-capita GDP shows that for all the good news around Canada’s jobs recovery, the economic situation for individual Canadians is still depressed.
The lag also shows the extent to which Canada is relying on population growth, currently running at about 1.1 per cent a year, to fuel its recovery in the face of tepid productivity. If productivity had kept pace with population growth, there would be no gap between the top line and per-capita measures.
The concern now is that the gap in Canada between GDP and GDP per capita is widening. The longer the economic rebound goes on without transferring the full benefit of that growth to Canadians, the less likely they’ll feel the economy is improving.
Decoder is a weekly feature that unpacks an important economic chart.