It would be nice if we could trust the numbers that governments report to us.

Unfortunately, that just isn’t the case these days.

The massive 430-page federal budget tabled this month, which contains half a trillion dollars in annual spending, relies on one big assumption: productivity growth.

The problem?

Canada is suffering from a productivity growth crisis.

Business sector productivity has flatlined in Canada, with the level of output per hour worked essentially unchanged from seven years ago.

Productivity growth is critical to our standard of living – it increases wages, and is the most important determinant of overall economic growth.

Buried deep in the federal budget is the governing Liberals’ assumption that the entire plan is based on strong labour productivity growth!

But, as the Bank of Canada confirms, labour productivity growth has been non-existent in Canada.

In fact, according to Statistics Canada, in 2023 “labour productivity of Canadian businesses fell 1.8%, a third consecutive annual decline.”

In other words, reality is completely at odds with the Liberal government’s assumptions.

This is unfortunately just the latest example of the federal government misleading Canadians.

Growth in gross domestic product (GDP) is one of the most frequently cited indicators of Canada’s economic performance.

The government – and journalists – often compare various measures of Canada’s total GDP growth to other countries to assess the health of the economy and living standards.

But when doing so, they ignore population changes, which can vastly skew the true results.

Here’s how: Finance Minister Chrystia Freeland often boasts that Canada experienced the “strongest economic growth in the G7” in 2022.

That sounds good – until you make a simple adjustment for population changes by comparing GDP per person.

Then, a completely different story emerges: Canada drops to the very bottom of the list, performing better than only Italy.

This is because Canada has had by far the fastest population growth rate in the G7, growing at an annualized rate of 1.1% – more than twice the annual population growth rate of the G7.

John, it is becoming more clear every day that if Canadians want the unvarnished truth, they need to rely on organizations like the Fraser Institute.

I’m happy to report that the budget reaction op-eds we published appeared in newspapers across the country, and reached millions of people on social media.

Every week we release expert, peer reviewed studies on topics just like this. Our mission is to improve the quality of life for Canadians, their families, and future generations by studying, measuring, and broadly communicating the effects of government policies, entrepreneurship, and choice on their well-being.

We don’t accept government funding to conduct our research – we rely entirely on supporters like you!

If you agree with our mission, please consider making a donation today [[link removed][campaignid]].

Thank you for your continued support.

Sincerely,

Niels Veldhuis

President

The Fraser Institute

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