GDP Per Capita Canada vs. USA 1960 to 2023

GDP per Capita Comparison: Canada vs. USA (1960-2023)

• 1. Canada's GDP per Capita often lags the USA's, with exceptions in 1976 & 2011-2012.
• 2. Recently, the gap hit 30% recently, echoing 2020, 1997-2002, & 1962.
• 3. The purchasing power of Canadians vs. Americans has been decreasing almost continuously since 1980.

In our humble opinion, this is happening because:

• Dynamic Capitalism in the USA: The reward system of capitalism fuels bold risk-taking and innovation, leading to increased wealth creation; however, it has some struggles with fair wealth distribution.
• Cautious Economic Approach in Canada: The Canadian economy leans towards stable sectors like natural resources and banking over tech, reflecting a risk-averse culture.
• Lower Employee Productivity in Canada: A variety of factors contribute to this, notably lesser investment per employee due to:
  • A. The USA's status as a reserve currency attracts more capital to its businesses.
  • B. A large portion of Canadian capital is continuously being funneled into real estate, creating real estate price bubbles.
• Less Field Expertise of Politicians in Canada: In Canada, ministers are elected officials who may sometimes have very limited experience in their designated ministries, while in the U.S. they can be leading experts.

The U.S. faces its own challenges, but the widening Purchasing Power Parity gap between Canada and USA should be a concern for all Canadians.