Note: This is an op-ed based on the Canadian portion of a paper I wrote (summarized here). I also wrote a similar op-ed based on the Australian portion of the paper. I wasn't able to find homes for these pieces, so I am posting them here.
Had Leo Tolstoy been a government bureaucrat, he might have written, “Every province is economically unhappy in its own way.” Across Canada, growth is weak and uneven: some regions are still reeling from the COVID-19 recession, while others have yet to fully recover from the 2014-15 slowdown, or even the Great Recession of 2008-09. Indeed, in Canada’s oil-producing provinces, growth is not just slow—it is in crisis.
Statistics Canada’s most recent provincial Gross Domestic Product (GDP) numbers (which extend through 2024) tell only part of the story. By controlling for inflation (using real GDP) and population (taking per capita figures), we can better determine actual levels of growth. Real GDP per capita reflects the average economic output per person, making it an excellent proxy for standards of living and productivity growth. High inflation and rapid population growth can otherwise mask underlying economic weakness.
Running the numbers (as I recently did in a study on regional growth in Canada, the United States, and Australia in The Journal of Regional Analysis and Policy) shows that although Canada’s real GDP per capita recovered from COVID-19 at a national level in 2022, this was not always true in the provinces. In Alberta and Newfoundland and Labrador (along with Manitoba and Saskatchewan), real GDP per capita is still lower than it was in 2020.
Indeed, looking even further back, Alberta’s real GDP per capita slump began in 2014, when oil prices collapsed; productivity in Wild Rose Country has not returned to this level in more than a decade. In Newfoundland, it began a decline in 2008 from which it has never recovered—in other terms, the Global Financial Crisis battered the province so severely that, in real per capita terms, Newfoundlanders are poorer than they were almost two decades ago. This is a scandal, indicating a profound failure of public administration.
On the other side of the ledger, Quebec and British Columbia snapped back the quickest from the pandemic, with Ontario matching the national average. But these achievements are overshadowed by the most worrying statistic of all: over 2022 to 2024 (the most recent data), real GDP per capita declined in nine provinces, including Alberta. (In Saskatchewan, the sole exception, it was flat.) As has been apparent for some time, Canada’s post-pandemic recovery stalled four years ago.
This trend becomes more alarming when we compare it with growth in the United States. Although real GDP per capita also fell across the fifty states in 2020, since then American growth has surged. Across the entire U.S., as of 2024, real GDP was shrinking only in Washington D.C.. Admittedly, Statistics Canada has yet to process the 2025 data. But given the economic turbulence last year, it seems doubtful that Canada registered rip-roaring growth.
Of course, there is no shortage of economic data and statistical metrics; real GDP per capita is just one among many. Nevertheless, if Canada is indeed to forge its own way in the world, it will need to sustain robust growth, and not just in Central Canada. Ensuring prosperity in all parts of the country could also reinforce fraying national unity: there is a direct line between Alberta’s falling productivity and local resentment.
Indeed, Ottawa bears a heavy responsibility for chronic underperformance in the oil-producing provinces. The Privy Council Office and the Department of Finance (where I worked for several years) should focus on growth-friendly policies that are tailored to local economic conditions; it should avoid the news-friendly narcotics of vague one-size-fits-all strategies, wasteful blanket spending, and dubious transfer schemes.
But provincial cabinet rooms also bear significant blame: the flipside of zealously guarding constitutional powers is using them effectively. Premiers should prioritize concrete measures to raise local productivity, and avoid using culture-war issues as a distraction from their own sorry economic records.
As Tolstoy the civil servant could have written, along with order and good government, Canadians are in need of Prosperity & Peace.