For nine years from 2006 to 2015, Canada was better managed than the United States. Its prime minister Stephen Harper, if too diffident and compromising for my taste, was notably more intelligent and economically capable than either U.S. President of the period, George W. Bush or Barack Obama. Its GDP growth matched that in the U.S., with both countries taking in too many immigrants for their own good but Canadian living standards holding up well. It even balanced its Budget in Harper’s penultimate year, something inconceivable in the United States then or now, though that was mostly an achievement of Harper’s finance minister the late Jim Flaherty. In a piece “Oh Canada – for crying out loud!” just after Trudeau’s election, I remarked “the Canadian electorate has spoken – fools!” That looks to have been a sound judgement, redoubled in force by the dreary decade that has followed.
The Canadian picture since 2015 is bleak and clear. GDP per capita has grown by 4.3% in the 2015-25 decade, whereas US GDP per capita grew by 47.4% (World Bank calculations – that U.S. figure looks high to me, despite the benign effect of five years of President Trump in the decade). The EU’s performance is closer to Canada than the United States, although with significantly faster growth in Eastern Europe because their previous communism has not yet been fully replaced by modern ‘woke’ socialism.
Overall, Canada has ceased to hold the advantages it used to have from its low population, huge land area, abundant natural resources and location next to the world’s largest market. The Canadian electorate’s action in the 2025 election was exceptionally foolish, even by the standards of their 2015 folly. They deliberately spurned the newly elected President of the United States, instead opting for his most bigoted and inflexible opponent among the candidates available.
Mark Carney had made himself very unpopular at the Bank of England by his refusal to work with the majority Brexit supporters in a civilized manner; it was economically suicidal of the Canadians to destroy their closest trading link by allowing him to perform a similar function for Canada against the United States. (Admittedly the “Conservative” candidate Pierre Poilievre made matters worse by denouncing Trump instead of vowing to work with him, thus giving Canadian voters no alternative to their leadership’s folly.)
Making Canada “one of the worst countries in the world to deal with” in President Trump’s words may suit Canada’s immense army of perverted leftists, but it is bad for the welfare and living standards of the Canadian people, as post-2015 data clearly shows. Canada’s recent attempt to build trade treaties with the EU is another retrograde step; it merely locks together two over-regulated socialist loser polities, both of which are rapidly impoverishing and demographically swamping their populace. There are signs of refreshing and long-overdue “populist” rebellion in EU countries such as Germany and France, but free-market reform barely exhibits a political pulse in dozy somnolent Canada.
There are two major policies (apart from generally higher levels of tax and regulation) that are making Canada uncompetitive with the United States. In both policy areas the country is following the lead of the unaccountable EU bureaucracy even when its southern neighbor shows it a better way. One is immigration. Canada has always had a laxer immigration policy than most countries, because its government has had an increasingly irrational belief that the country is generally underpopulated. Limiting immigration should be relatively easy for Canada because it has no land borders with any poor countries. Nor, unlike Britain, does it have a supranational federation next door with sloppy immigration policies, a refusal to police its own borders properly and a desire to palm off its worst immigrant flotsam on its neighbors. Nevertheless, even with its natural advantages, Canada still suffers from an annual influx of some 500,000 legal and “refugee” immigrants, a grossly excessive number for a country of only 41 million population.
Despite the country’s enormous size and low population density, high immigration has caused an appalling inflation in Canadian house prices, which has made the Canadian Dream inaccessible for ordinary Canadians. It has also put enormous pressure on schools, crime and quality of life in the major cities, rightly stirring resentment among a populace that had previously lived in an exceptionally clean, pleasant and low-crime society. Naturally, its political effect, as always, is dire; the substantial majorities gained by Harper in 2006-15 have faded into memory, with the new immigrants forming a huge voting bloc aligned almost entirely with the welfare-seeking Left.
If Canada had a vibrant, rapidly expanding economy, this might not be a problem, since economic growth would easily absorb even such large numbers of workers without squeezing the domestic population’s living standards. However, Canada has no such thing. The country has always had an excess of regulation, possibly reflecting the strong French influence on its politics. More recently, it has seized enthusiastically on the climate change mania, passing legislation in 2021 to achieve “net zero” carbon emissions by 2050.
For Canada, this is especially foolish, for two reasons. First, its population is increasing rapidly because of excess immigration, so targets related to emissions a decade ago take no account of the incremental housing, traffic and heating costs that are being incurred to meet the immigrant population’s needs.
Second, Canada would be a major beneficiary of a moderate global warming trend — anything up to 5 degrees Celsius — provided it occurred over a period of a century or so. Canada’s frozen north would be opened up by such a climate change, vastly increasing its agricultural potential and making places like Thunder Bay and northern Labrador major modern metropolises instead of frozen backwaters with legendarily unpleasant winters. Sea routes would also open up, with Hudson’s Bay becoming a hugely important inland sea with major ports giving access to both the Atlantic and the Pacific through its northern exits. Baffin Island, with 195,800 square miles of territory and only 13,000 inhabitants, could potentially be opened to become a major haven of industry and commerce. With the United Nations’ Intergovernmental Panel on Climate Change having abandoned its absurd previous “high” projection of a 7.8 degrees Celsius increase in temperature by 2100, Canada should welcome any more moderate climate change, embrace its effects, and modify its own technology to speed its arrival.
The Ontario manufacturing nexus may attract millions of migrants, but it is not where Canada’s future lies, unless policy changes drastically. Even with a massive exchange rate advantage at USD0.72 = CAD 1, Ontario’s manufacturing is still so inefficient that it cannot compete with U.S. industry across the border, let alone with the far more efficient un-unionized industry in the southern U.S. states or the low-wage behemoths of India and China. Tech graduates of Canadian universities make straight for California or Texas, as from their own viewpoint they should. Canada’s enormous strategic advantage is its gigantic mineral wealth, much of which is still unexplored and will be opened up further should the planet warm. To unlock that wealth and make Canada more competitive than any other mining destination, two major legislative changes must occur: Canada’s onerous environmental regulations must be scrapped and its property rights must be made certain, not subject to harassment by leftist scamsters allegedly representing the First Nations.
With its current economic policies, Canada is a living standards lemming, hurling itself over the cliff into dire future poverty. The great Canadian leaders such as Sir John A. Macdonald and Sir Wilfrid Laurier would have made sure this never happened. One must hope for its people’s sake that the Canadian electorate wakes up to its domestic opportunities and its imported dangers and reorients government policy to take full advantage of the country’s superb resource endowment. In both minerals and agriculture, that endowment will rapidly increase further should climate change occur as its proponents claim. The Canadian people will then become rapidly richer not poorer, as they should.
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(The Bear’s Lair is a weekly column that is intended to appear each Monday, an appropriately gloomy day of the week. Its rationale is that the proportion of “sell” recommendations put out by Wall Street houses remains far below that of “buy” recommendations. Accordingly, investors have an excess of positive information and very little negative information. The column thus takes the ursine view of life and the market, in the hope that it may be usefully different from what investors see elsewhere.)