Tracy Gray: Worrying economic signs as Canada grows poorer relative to US

Tracy Gray is the Conservative Party MP for the riding of Kelowna–Lake Country.

Contributions published by KelownaNow reflect only the opinions of those who write them, and not necessarily those of KelownaNow or its staff.

When Liberal government ministers are answering questions on the current state of Canada’s economic affairs, they are attempting to paint a rosy picture. The minister of finance recently spoke to reporters and stated Canada’s economy is “strong and resilient, [and that] the economic plan is fiscally responsible.”

Many key economic indicators do not align with those statements.

One of the most important economic indicators is the unemployment rate, which refers to the proportion of the population without a job. Unemployment trending upwards is a negative economic indicator. Five months ago at the Human Resources Committee, the Liberal minister of employment stated that “unemployment is trending downward.”

Unfortunately, the government’s own numbers confirmed the minister’s remarks are not holding true. According to the most recent Statistics Canada Labour Force Survey, Canada’s unemployment rate was 6.1 per cent for April 2024 and it’s been trending upwards since last fall.

What is even more troubling is that the government’s Budget 2024 stated it predicts unemployment to rise even more as it’s predicting the economy slowing into 2024.

This indictor is especially worrying among youth aged 15-24, where the unemployment rate sits at 12.6 per cent. When young Canadians are unable to secure a first job, they are less likely to be able to move out from their parent’s house, gain valuable experience and further their early career aspirations.

Another economic indicator of importance is the GDP per capita of a country. GDP per capita reflects economic activity occurring on a per-person basis, a number much more relevant than only GDP itself.

A higher GDP per capita means higher productivity, leading to higher wages, higher quality of life and higher standard of living. A low GDP per capita is associated with lower income, greater poverty and lower quality of life.

Statistics Canada and the International Monetary Fund have both reported a drop in Canada’s GDP per capita. Recently, the Fraser Institute published data showing that Canada’s GDP per capita fell by three per cent the last four years. This indicates Canada’s economy is not flourishing and the standard of living of Canadians has decreased. The numbers are jarring given the GDP per capita of the United States increased by seven per cent since 2019.

Analysis by the Organisation for Economic Co-operation and Development (OECD) expects Canada to have the slowest growth in per capita GDP among its 38 member countries over the next forty years. Per capita GDP in Canada has now significantly fallen to just 73 per cent of US levels.

Another measurement of a weak economy is the Canadian dollar being consistently low. Canada’s economy is integrated in many ways with our biggest trading partner, the United States. A low dollar means Canadians’ spending power is less relative to US costs. This means that everything Canadians buy that is made in the US – whether it is a refrigerator, a bicycle, or anything else – costs Canadians more.

Economic indicators related to housing also have worrying figures. According to Statistics Canada, housing starts across the country are down nine per cent compared to this time last year. It’s even worse in British Columbia where it’s down 11 per cent and Vancouver’s down a staggering 30 per cent. Housing starts in the US are up, again showing Canada’s lag comparatively.

Another troubling indicator from Statistics Canada is the reduction of 11,000 jobs within the construction sector. This warrants concerns over how the federal government will meet their announced aggressive and obviously out of touch house building targets with such a decreasing workforce.

The troubling figures seen in these economic indicators are all items that my Conservative colleagues and I will be focusing on in the coming months as we debate the ninth Liberal deficit-spending and tax-increase budget which affects employment, affordability, quality of life and housing – all important issues I hear continually about from local residents.

If you need assistance with federal programs or have any thoughts to share, feel free to reach out at 250-470-5075 or at tracy.gray@parl.gc.ca.