Arcus Consulting Group – Economic Insights
For the first time, Statistics Canada has begun publishing official quarterly GDP-per-capita data — a long-awaited move that makes visible what many economists have been warning about: Canada’s economic output per person has stalled.
Until now, analysts had to manually divide GDP (Table 36-10-0434-01) by population estimates (Table 17-10-0009-01). On August 29 2025, StatsCan released Table 36-10-0706-01, “Gross domestic product per capita and other per capita macro-economic indicators.” View table
That new dataset confirms what many international observers had flagged: while Canada’s total GDP continues to rise with record immigration and population expansion, GDP per capita — the measure of national income per person — has essentially flat-lined. By mid-2025, real GDP per capita was roughly on par with 2017 levels, erasing nearly a decade of progress.
Why Canada’s GDP Per Capita Has Stalled
1. Productivity slump
Business investment in machinery, automation, and R&D remains far below U.S. levels. The Organisation for Economic Co‑operation and Development (OECD) 2025 Survey cites weak productivity as the single biggest drag on per-capita income growth. OECD report
2. Population dilution
Rapid population growth — particularly from temporary residents and students — boosts aggregate GDP but reduces per-person averages when many new entrants enter lower-output sectors.
3. Structural friction
Inter-provincial trade barriers, infrastructure delays, and slower technology adoption all continue to erode competitiveness.
How Government Spending Masks the Decline
Between 2014 and 2024, public-sector employment grew by approximately 27 %, while private-sector employment rose by about 15 %. | Year-by-year snapshot:
| Year | Public-Sector Jobs (m) | Private-Sector Jobs (m) | Growth since 2014 (Public) | Growth since 2014 (Private) |
| 2014 | 3.47 | 11.63 | — | — |
| 2016 | 3.63 | 11.84 | +4.6 % | +1.8 % |
| 2018 | 3.81 | 12.09 | +9.8 % | +3.9 % |
| 2020 | 3.95 | 12.35 | +13.8 % | +6.2 % |
| 2022 | 4.21 | 12.93 | +21.3 % | +11.2 % |
| 2024 | 4.41 | 13.38 | +27.0 % | +15.1 % |
Sources: Statistics Canada Table 14-10-0287-03; C.D. Howe Institute; The Hub
Roughly one in four Canadian workers is now in the public sector. These roles contribute to GDP through wages and consumption, but do not directly generate export or market-based output. Post-pandemic stimulus and payroll growth have created a statistical mirage — GDP rises, but largely via public spending rather than increased private-sector productivity. With the federal budget set for November 4, these dynamics become especially relevant: the government must decide whether to double down on spending or pivot toward productivity-led growth.
When and Why GDP Accelerated
There have been short-term bursts of acceleration:
- Post-pandemic rebound (2021-22): reopening and stimulus lifted consumption and investment.
- Commodity booms (2006-08, 2010-14): high energy prices boosted per-capita income.
- U.S. growth cycles: strong American economic expansion often lifts Canada via trade and investment.
Yet these gains were cyclical, not structural — meaning underlying productivity weakness returned once external tailwinds faded.
The Growing Gap with the U.S.
World Bank data show Canada’s GDP per capita now sits at roughly 78 % of the U.S. level — down from near-parity in the 1980s. World Bank data
What It Means for the Upcoming Budget, Policy and Business
Canada’s prosperity challenge is productivity, not raw population growth. Sustainable improvement in living standards requires higher private-sector output per worker through innovation, capital investment, and skills development. Ahead of the November budget, policymakers must ask: will spending simply expand the public-sector wage base, or will it shift resources toward productivity-enhancing investments? Without that shift, a swelling public sector and rising population will continue to inflate GDP totals while individual living standards stagnate.
For business leaders and policymakers, the new StatsCan release is more than a dataset — it’s a dashboard warning light. Canada’s economic story isn’t ultimately about how big the economy looks on paper, but how much prosperity each Canadian actually creates and shares.
About Arcus
Arcus Consulting Group is a Canadian strategy and management consultancy focused on productivity, competitiveness, and growth. Founded in 2005, Arcus advises business and public sector leaders across Canada, Europe, and the United States, helping them navigate structural economic change through data-driven analysis, evidence-based insight, and strategic foresight.
www.arcusgroup.ca