Business
Canada’s economy has stagnated despite Ottawa’s spin
From the Fraser Institute
By Ben Eisen, Milagros Palacios and Lawrence Schembri
Canada’s inflation-adjusted per-person annual economic growth rate (0.7 per cent) is meaningfully worse than the G7 average (1.0 per cent) over this same period. The gap with the U.S. (1.2 per cent) is even larger. Only Italy performed worse than Canada.
Growth in gross domestic product (GDP), the total value of all goods and services produced in the economy annually, is one of the most frequently cited indicators of Canada’s economic performance. Journalists, politicians and analysts often compare various measures of Canada’s total GDP growth to other countries, or to Canada’s past performance, to assess the health of the economy and living standards. However, this statistic is misleading as a measure of living standards when population growth rates vary greatly across countries or over time.
Federal Finance Minister Chrystia Freeland, for example, recently boasted that Canada had experienced the “strongest economic growth in the G7” in 2022. Although the Trudeau government often uses international comparisons on aggregate GDP growth as evidence of economic success, it’s not the first to do so. In 2015, then-prime minister Stephen Harper said Canada’s GDP growth was “head and shoulders above all our G7 partners over the long term.”
Unfortunately, such statements do more to obscure public understanding of Canada’s economic performance than enlighten it. In reality, aggregate GDP growth statistics are not driven by productivity improvements and do not reflect rising living standards. Instead, they’re primarily the result of differences in population and labour force growth. In other words, they aren’t primarily the result of Canadians becoming better at producing goods and services (i.e. productivity) and thus generating more income for their families. Instead, they primarily reflect the fact that there are simply more people working, which increases the total amount of goods and services produced but doesn’t necessarily translate into increased living standards.
Let’s look at the numbers. Canada’s annual average GDP growth (with no adjustment for population) from 2000 to 2023 was the second-highest in the G7 at 1.8 per cent, just behind the United States at 1.9 per cent. That sounds good, until you make a simple adjustment for population changes by comparing GDP per person. Then a completely different story emerges.
Canada’s inflation-adjusted per-person annual economic growth rate (0.7 per cent) is meaningfully worse than the G7 average (1.0 per cent) over this same period. The gap with the U.S. (1.2 per cent) is even larger. Only Italy performed worse than Canada.
Why the inversion of results from good to bad? Because Canada has had by far the fastest population growth rate in the G7, growing at an annualized rate of 1.1 per cent—more than twice the annual population growth rate of the G7 as a whole at 0.5 per cent. In aggregate, Canada’s population increased by 29.8 per cent during this time period compared to just 11.5 per cent in the entire G7.
Clearly, aggregate GDP growth is a poor tool for international comparisons. It’s also not a good way to assess changes in Canada’s performance over time because Canada’s rate of population growth has not been constant. Starting in 2016, sharply higher rates of immigration have led to a pronounced increase in population growth. This increase has effectively partially obscured historically weak economic growth per person over the same period.
Specifically, from 2015 to 2023, under the Trudeau government, inflation-adjusted per-person economic growth averaged just 0.3 per cent. For historical perspective, per-person economic growth was 0.8 per cent annually under Brian Mulroney, 2.4 per cent under Jean Chrétien and 2.0 per cent under Paul Martin.
Due to Canada’s sharp increase in population growth in recent years, aggregate GDP growth is a misleading indicator for comparing economic growth performance across countries or time periods. Canada is not leading the G7, or doing well in historical terms, when it comes to economic growth measures that make simple adjustments for our rapidly growing population. In reality, we’ve become a growth laggard and our living standards have largely stagnated for the better part of a decade.
Authors:
From Heartland Daily News
By Nick Pope
“California and an unaccountable EPA are trying to transform our national trucking industry and supply chain infrastructure. This effort—coming at a time of heightened inflation and with an already-strained electrical grid—will devastate the trucking and logistics industry, raise prices for customers, and impact untold number of jobs across Nebraska and the country”
Large coalitions of red states are suing regulators in Washington, D.C., and California over rules designed to effectively require increases in electric vehicle (EV) adoption.
Nebraska is leading a 24-state coalition in a lawsuit against the Environmental Protection Agency’s (EPA) recently-finalized emissions standards for heavy-duty vehicles in the U.S. Court of Appeals for the D.C. Circuit, and a 17-state coalition suing the state of California in the U.S. District Court for the Eastern District of California over its Advanced Clean Fleet rules. Both regulations would increase the number of heavy-duty EVs on the road, a development that could cause serious disruptions and cost increases across the U.S. economy, as supply chain and trucking sector experts have previously told the Daily Caller News Foundation.
“California and an unaccountable EPA are trying to transform our national trucking industry and supply chain infrastructure. This effort—coming at a time of heightened inflation and with an already-strained electrical grid—will devastate the trucking and logistics industry, raise prices for customers, and impact untold number of jobs across Nebraska and the country,” Republican Nebraska Attorney General Mike Hilgers said in a statement. “Neither California nor the EPA has the constitutional power to dictate these nationwide rules to Americans. I am proud to lead our efforts to stop these unconstitutional attempts to remake our economy and am grateful to our sister states for joining our coalitions.”
(RELATED: New Analysis Shows Just How Bad Electric Trucks Are For Business)
While specifics vary depending on the type of heavy-duty vehicle, EPA’s emissions standards will effectively mandate that EVs make up 60% of new urban delivery trucks and 25% of long-haul tractors sold by 2032, according to The Wall Street Journal. The agency has also pushed aggressive emissions standards for light- and medium-duty vehicles that will similarly force an increase in EVs’ share of new car sales over the next decade.
California’s Advanced Clean Fleet rules, meanwhile, will require that 100% of trucks sold in the state will be zero-emissions models starting in 2036, according to the California Air Resources Board (CARB). While not federal, the California rules are of importance to other states because there are numerous other states who follow California’s emissions standards, which can be tighter than those required by the EPA and other federal agencies.
Critics fear that this dynamic will effectively enable California to set national policies and nudge manufacturers in the direction of EVs at a greater rate and scale than the Biden administration is pursuing.
Trucking industry and supply chain experts have previously told the DCNF that both regulations threaten to cause serious problems for the country’s supply chains and wider economy given that the technology for electric and zero-emissions trucks is simply not yet ready to be mandated at scale, among other issues.
Neither CARB nor the EPA responded immediately to requests for comment.
Nick Pope is a contributor to The Daily Caller News Service.
Originally published by The Daily Caller. Republished with permission.
From the Daily Caller News Foundation
By WILL KESSLER
Converting America’s medium- and heavy-duty trucks to electric vehicles (EV) in accordance with goals from the Biden administration would add massive costs to commercial trucking, according to a new analysis released Wednesday.
The cost to switch over to light-duty EVs like a transit van would equate to a 5% increase in costs per year while switching over medium- and heavy-duty trucks would add up to 114% in costs per year to already struggling businesses, according to a report from transportation and logistics company Ryder Systems. The Biden administration, in an effort to facilitate a transition to EVs, finalized new emission standards in March that would require a huge number of heavy-duty vehicles to be electric or zero-emission by 2032 and has created a plan to roll out charging infrastructure across the country.
“There are specific applications where EV adoption makes sense today, but the use cases are still limited,” Karen Jones, executive vice president at Ryder, said in an accompanying press release. “Yet we’re facing regulations aimed at accelerating broader EV adoption when the technology and infrastructure are still developing. Until the gap in TCT for heavier-duty vehicles is narrowed or closed, we cannot expect many companies to make the transition, and, if required to convert in today’s market, we face more supply chain disruptions, transportation cost increases, and additional inflationary pressure.”
Due to the increase in costs for businesses, the potential inflationary impact on the entire economy per year is between 0.5% and 1%, according to the report. Inflation is already elevated, measuring 3.5% year-over-year in March, far from the Federal Reserve’s 2% target.
Increased expense projections differ by state, with class 8 heavy-duty trucks costing 94% more per year in California compared to traditional trucks, due largely to a 501% increase in equipment costs, while cost savings on fuel only amounted to 52%. In Georgia, costs would be 114% higher due to higher equipment costs, labor costs, a smaller payload capacity and more.
The EPA also recently finalized rules mandating that 67% of all light-duty vehicles sold after 2032 be electric or hybrid. Around $1 billion from the Inflation Reduction Act has already been designated to be used by subnational governments in the U.S. to replace some heavy-duty vehicles with EVs, like delivery trucks or school buses.
The Biden administration has also had trouble expanding EV charging infrastructure across the country, despite allotting $7.5 billion for chargers in 2021. Current charging infrastructure frequently has issues operating properly, adding to fears of “range anxiety,” where EV owners worry they will become stranded without a charger.
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