VANCOUVER—In 1999, GDP per person in the U.S. was CA$10,766 higher than in Canada, and by 2024 this difference had increased to CA$23,757—meaning the gap in living standards between Canada and the U.S. has more than doubled, according to a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

The study compares economic outcomes in the two countries by looking at several economic measures, specifically living standards, incomes, employment, investment, and productivity in Canada and the United States. In every category, Canada has fallen further behind the U.S. over the first quarter of the century.

The study finds that in 1999, inflation-adjusted GDP per person in Canada was CA$48,076 while the U.S. was CA$58,842. However, by 2024 GDP per person had grown to $83,286 in the U.S. compared to just $59,529 in Canada.

Similarly, in 2010 (the earliest year of comparable data) inflation-adjusted median employment income was CA$6,126 higher in the US than in Canada. By 2024, that gap had increased to CA$8,663.

From 1999 to 2024, Canada experienced a decline in private sector employment as a share of total employment from 81.2 per cent to 78.5 per cent, meaning the government sector outgrew the private sector. The opposite occurred in the U.S. as private sector employment increased from 85.8 per cent of total employment to 86.5 per cent.

Meanwhile, labour productivity—a key driver of income growth—in the U.S. grew by 67.9 per cent between 1999 and 2025 compared to a 26.7 per cent increase in Canada during the same period.

“The ability of transform raw materials and other inputs into demanded goods and services increased by more than a factor of 2.0 in the U.S. compared to Canada, which explains much of our languishing living standards,” explained Fuss.

For business investment—which equips workers with the tools and technology they need to produce more/higher quality goods and services—investment in Canada dropped from nearly 90 cents (per worker) for every dollar invested in the U.S. to 54 cents (per worker) between 2007 (the earliest year of comparable data) to 2024.

“After squandering the first quarter of the 21^st century, it’s up to policymakers in Canada to enact bold economic reforms to make the most of the rest of this century,” said Grady Munro, senior policy analyst and co-author.

Fraser Institute——Bio and Archives

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute’s independence, it does not accept grants from governments or contracts for research. Visit fraserinstitute.org.

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