Commentary
I have lived and worked in Toronto for most of my adult life. During the economic downturns of the early 1980s and early 1990s, I don’t recall seeing food bank lineups stretching down the block or people waiting outside churches for a meal. That was not the landscape of those years. It is the landscape now. Something has changed structurally, and the data shows exactly what.
Across four distinct economic eras since 1983—each representing a recovery and expansion phase when the system was supposedly functioning as intended—every key indicator of ordinary Canadian economic life has moved in the wrong direction.
The house price-to-income ratio is the most unforgiving number in the table. In the 1983–1989 era, a median Canadian home cost roughly three times the median household income. Today it costs eight times that much. That ratio has deteriorated in every single era without exception, under every government of every partisan stripe.
Housing affordability is not a recent problem. It is a 40-year process of slow exclusion from the primary vehicle through which ordinary Canadian families built intergenerational wealth.
The real
GDP per capita figure tells an equally sobering story. Canada grew at roughly 2.8 percent per capita in the 1980s recovery. That figure has declined in every subsequent era, reaching an almost negligible 0.3 percent in 2020–2025—and that number is itself flattering, distorted upward by the COVID-19 recovery bounce and by the fact that Canada’s rapid population growth through immigration diluted per capita output even as headline GDP appeared to grow. In plain terms, the average Canadian got significantly poorer on a per-person basis in the most recent era even as the economy appeared to expand.
Real
wage growth tells the same story. Adjusted for actual price increases—particularly the true cost of rent and food that official inflation measures significantly understate—median real wages in Canada were effectively negative in the 2020–2025 period. Workers earning more nominal dollars were falling behind in purchasing power. Canadians are working approximately 27 percent more hours to cover median rent and 23 percent more hours to cover
food costs than they were five years ago. That is not a statistical abstraction. It is the lived experience of a large and growing proportion of the working population.
It would be convenient to attribute all of this to a single government or party, but everyone has played a part in this situation.
The Mulroney era delivered reasonable growth but left a fiscal inheritance—deficits averaging 4–5 percent of GDP—that nearly produced a sovereign debt crisis by the early 1990s, but the Mulroney government had also inherited a significant debt burden from the Pierre Trudeau era. The Chrétien government inherited that crisis and struggled initially, but Paul Martin’s work as finance minister produced a genuine fiscal transformation—balanced budgets, falling debt, the strongest Canadian fiscal position in a generation—that stands as the one creditable chapter in the 40-year fiscal record.
The Harper era kept things relatively steady through difficult global conditions, navigating 2008 better than most G7 peers, but reversed none of the structural deterioration in housing or wage growth. The Justin Trudeau era accelerated trends that were already well established—the housing crisis, the debt expansion, the per capita income decline—to a degree that is genuinely without precedent in the post-war period.
But federal governments do not govern alone. The three provinces that represent roughly 75 percent of Canadian GDP and population—Ontario, Quebec, and British Columbia—have their own long record of economic governance spanning every partisan combination imaginable. The structural problems that show up in the national data were compounded at the provincial level by governments of every stripe across three decades. Some governments were better than others, but the trend remained negative.
This is not a partisan story. It is a systemic one.
How does
Canada compare to its closest neighbour? The United States has its own structural problems—a house price-to-income ratio that has moved from 3.5 times to 5.5 times over the same period, anemic real-wage growth, and a debt-to-GDP ratio approaching 120 percent. But Canada’s deterioration has been more severe on almost every measure except government debt. Canadians incur far worse household debt than Americans—a reflection of the housing crisis and a struggling consumer.
The GDP per capita gap between the two countries has widened dramatically in the most recent era. The housing affordability gap is now stark—8.0 times income in Canada versus 5.5 times in the United States. And real wages in Canada have declined in purchasing power terms while American workers at least held even.
The question is not which party to blame. Every party has contributed to the conditions that produced the lineups outside those churches and food banks. The question is whether Canadians understand clearly enough what has happened—and whether our political system is capable of producing something genuinely different.
CANADIAN MACROECONOMIC METRICS — SOURCE DATA
CPI Inflation
Source: Statistics Canada, Table 18-10-0004-01, Consumer Price Index annual averages
Real GDP / Capita
Source: World Bank, Canada GDP per capita growth (annual %)
Unemployment
Source: Statistics Canada, Table 14-10-0287-01, Labour Force Survey
Real Wage Growth
Source: Statistics Canada SEPH, Table 14-10-0064-01, average weekly earnings deflated by CPI
House Price / Income
Source: CREA national average home price data; Statistics Canada Table 11-10-0190-01 median household income
TSX Total Return
Source: S&P/TSX Composite historical price returns plus estimated ~2.5% dividend yield
