Given their dismal economic record after 10 years in power, it’s hard to comprehend why anyone would trust the federal Liberals to be responsible stewards of the nation’s finances heading into this year’s election.
Indeed, it’s an issue on which Liberal leadership frontrunner (and prime minister-in-waiting) Mark Carney and Conservative Leader Pierre Poilievre agree.
Both have said Prime Minister Justin Trudeau and the Liberals lost control of the federal budget, deficits and debt, overspent and overtaxed the middle class and that a tax cut is now needed to partially alleviate the financial damage these caused.
One of the key measures of a nation’s prosperity and its standard of living is known as real gross domestic product per capita — how much money an economy is generating per person, adjusted for inflation.
Statistics Canada reported in November that Canada’s real GDP per capita fell by 0.4% in the third quarter of 2024 (July to September), its sixth consecutive quarterly decline.
To be fair, this issue preceded the Liberals, but it’s getting worse.
As the Globe and Mail noted in a January editorial, “After nearly a decade under the Liberals, the dollar value of each Canadian’s share of national economic output has barely changed — just 1.9% higher than when the Liberals took power. Under (Stephen) Harper, Canadians’ prosperity, as measured by real GDP per capita, grew by more than twice as much over a similar period.”
The Liberals have tried to confuse the public by focusing on Canada’s annual economic growth rate, without factoring in population.
The reason those numbers look better is due to the high immigration policies the Trudeau government pursued.
High immigration creates more demand for goods and services, but if the population is growing faster than the economy,
it makes overall economic performance worse.
Trudeau’s government knew this because it ignored warnings from its public servants that high immigration would increase the cost of living and negatively impact already beleaguered public services such as health care.
Eventually, even Trudeau had to admit the Liberals had blundered and belatedly lowered future immigration targets.
Slightly.
But there’s more.
Real GDP per capita is directly related to productivity — which is plummeting compared to our largest trading partner — the United States.
Low productivity doesn’t mean Canadian workers are lazy compared to those in the U.S. or anywhere else. It means they aren’t being given access to the education, training and new technologies needed to work more efficiently, because of a lack of business investment.
As Liberal leadership contender Chrystia Freeland, former deputy prime minister and finance minister, noted in her 2022 budget, “Most Canadian businesses have not invested at the same rate as their U.S. counterparts.
“Unless this changes, the Organization for Economic Co-operation and Development projects Canada will have the lowest per-capita GDP growth rate among its member countries” from 2020 to 2060.
Freeland called this “the Achilles heel of the Canadian economy” adding, “Productivity matters because it is what guarantees the dream of every parent — that our children will be more prosperous than we are. This is a well-known Canadian problem — an insidious one. It is time for Canada to tackle it.”
The problem is that the Liberals not only didn’t tackle it, they made it worse through their big deficit, big debt and Byzantine regulatory policies perceived by many potential investors as hostile to business.
The Liberals’ claim they are best equipped to fix the mess their policies helped to create is absurd.