Canadians don’t just feel worse off—they actually are

A recent survey indicates that the majority of Canadians feel worse off now than in 2020. New data from Statistics Canada show these feelings aren’t unfounded, and that Canadians indeed suffer a worse standard of living than they had in recent years.

According to the survey, 61 per cent of respondents said they are financially worse off than they were before the pandemic, while 89 per cent find it harder to manage expenses on everyday items such as food and shelter. In other words, most Canadians feel they have a lower standard of living than they did in recent years.

The new numbers from Statistics Canada show that inflation-adjusted (GDP)—the final value of all goods and services produced in the economy—shrank by 0.4 per cent during the second quarter of 2025 (i.e. from the beginning of April to the end of June). Population growth was essentially flat during those same three months, meaning inflation-adjusted per-person GDP—a broad measure of individual living standards— declined to $58,855 as of July 2025.

The decline in per-person GDP this quarter may be in part driven by U.S. tariffs, which began taking effect in March. And while Canada previously enjoyed two consecutive quarters of growing per-person GDP at the end of 2024 and beginning of 2025, it’s likely that Canadian businesses and consumers alike shifted spending forwards in order to avoid threatened tariffs. Put simply, per-person GDP growth in previous two quarters may have been fuelled by a shift in spending, which also helped to set up the observed slowdown in economic activity once tariffs began to take effect.

However, Canadian living standards have been stagnant since long before President Trump retook office—indeed, the current standard of living is below the level it was in the middle of 2019 ($59,905) before the pandemic. Moreover, stagnant living standards aren’t a universal problem. For perspective, per-person GDP (adjusted for inflation) in the United States grew by 11.0 per cent from mid-2019 to mid-2025.

Simply put, not only do Canadians feel that they are worse off than in recent years, the data shows they actually are. As such, governments across the country must implement policies that promote economic growth.

Policymakers at all levels of government have discussed the importance of strengthening the economy through various policies, including through removing interprovincial trade barriers and calls for additional tax relief for Canadians. Interprovincial trade barriers inhibit the free flow of goods and services between provinces, and uncompetitively high taxes make Canada less attractive to top talent while also discouraging productive economic behaviour like work, savings, investment and entrepreneurship. Both of these effects act as a drag on the economy, and as such policymakers are correct to highlight these areas.

However, one area that falls under the radar is the growing mountain of government debt in Canada. The persistence of annual budget deficits—where government spends more than it collects in revenues, and must borrow money to make up the difference—in recent years has pushed combined federal and provincial net debt (total debt minus financial assets) to a projected $2.30 trillion as of 2024/25. Despite a growing body of evidence that links higher government debt to slower economic growth (this can happen for many reasons), the federal government along with many provinces plan to continue running deficits and grow the mountain of debt. For perspective, one study found that reducing Canada’s debt to GDP ratio—the size of Canada’s debt relative to the economy—to pre-pandemic levels could boost annual incomes for an average employee by approximately $2,100 (inflation-adjusted). Put simply, governments across the country need to lower spending, balance their budgets, and begin paying down their respective debt burdens.

Not only do Canadians feel they are worse off than they were in recent years, new data shows that living standards actually are worse off. To help turn things around, governments across the country must pursue policies that promote economic growth.

Related Topics:#CanadaEconomy #FraserInstitute #GradyMunro #TeganHill CanadianStandardOfLiving feature InflationAdjustedGDP

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Business

Major tax changes in 2026: Report

Published on December 15, 2025

Todayville

By Franco Terrazzano

The Canadian Taxpayers Federation released its annual New Year’s Tax Changes report today to highlight the major tax changes in 2026.

“There’s some good news and bad news for taxpayers in 2026,” said Franco Terrazzano, CTF Federal Director. “The federal government cut income taxes, but it’s hiking payroll taxes. The government cancelled the consumer carbon tax, but it’s hammering Canadian businesses with a higher industrial carbon tax.”

Payroll taxes: The federal government is raising the maximum mandatory Canada Pension Plan and Employment Insurance contributions in 2026. These payroll tax increases will cost a worker up to an additional $262 next year.

For workers making $85,000 or more, federal payroll taxes (CPP and EI tax) will cost $5,770 in 2026. Their employers will also be forced to pay $6,219.

Income tax: The federal government cut the lowest income tax rate from 15 to 14 per cent. This will save the average taxpayer $190 in 2026, according to the Parliamentary Budget Officer.

Carbon taxes: The government cancelled its consumer carbon tax effective April 1, 2025. However, the government still charges carbon taxes through its industrial carbon tax and a hidden carbon tax embedded in fuel regulations.

The industrial carbon tax will increase to $110 per tonne in 2026. While the government hasn’t provided further details on how much the industrial carbon tax will cost Canadians, 70 per cent of Canadians believe businesses pass on most or some of the cost of the tax to consumers, according to a Leger poll.

Alcohol taxes: Federal alcohol taxes are expected to increase by two per cent on April 1, 2026. This alcohol tax hike will cost taxpayers about $41 million in 2026-27, according to industry estimates.

First passed in the 2017 federal budget, the alcohol escalator tax automatically increases excise taxes on beer, wine and spirits every year without a vote in Parliament. Since being imposed, the alcohol escalator tax has cost taxpayers about $1.6 billion, according to industry estimates.

“Canadians pay too much tax because the government wastes too much money,” Terrazzano said. “Canadians are overtaxed and need serious tax cuts to help make life more affordable and our economy more competitive.

“Prime Minister Mark Carney needs to significantly cut spending, provide major tax relief and scrap all carbon taxes.”

You can read the CTF’s New Year’s Tax Changes report here.

Automotive

Politicians should be honest about environmental pros and cons of electric vehicles

Published on December 14, 2025

Todayville

From the Fraser Institute

By Annika Segelhorst and Elmira Aliakbari

According to Steven Guilbeault, former environment minister under Justin Trudeau and former member of Prime Minister Carney’s cabinet, “Switching to an electric vehicle is one of the most impactful things Canadians can do to help fight climate change.”

And the Carney government has only paused Trudeau’s electric vehicle (EV) sales mandate to conduct a “review” of the policy, despite industry pressure to scrap the policy altogether.

So clearly, according to policymakers in Ottawa, EVs are essentially “zero emission” and thus good for environment.

But is that true?

Clearly, EVs have some environmental advantages over traditional gasoline-powered vehicles. Unlike cars with engines that directly burn fossil fuels, EVs do not produce tailpipe emissions of pollutants such as nitrogen dioxide and carbon monoxide, and do not release greenhouse gases (GHGs) such as carbon dioxide. These benefits are real. But when you consider the entire lifecycle of an EV, the picture becomes much more complicated.

Unlike traditional gasoline-powered vehicles, battery-powered EVs and plug-in hybrids generate most of their GHG emissions before the vehicles roll off the assembly line. Compared with conventional gas-powered cars, EVs typically require more fossil fuel energy to manufacture, largely because to produce EVs batteries, producers require a variety of mined materials including cobalt, graphite, lithium, manganese and nickel, which all take lots of energy to extract and process. Once these raw materials are mined, processed and transported across often vast distances to manufacturing sites, they must be assembled into battery packs. Consequently, the manufacturing process of an EV—from the initial mining of materials to final assembly—produces twice the quantity of GHGs (on average) as the manufacturing process for a comparable gas-powered car.

Once an EV is on the road, its carbon footprint depends on how the electricity used to charge its battery is generated. According to a report from the Canada Energy Regulator (the federal agency responsible for overseeing oil, gas and electric utilities), in British Columbia, Manitoba, Quebec and Ontario, electricity is largely produced from low- or even zero-carbon sources such as hydro, so EVs in these provinces have a low level of “indirect” emissions.

However, in other provinces—particularly Alberta, Saskatchewan and Nova Scotia—electricity generation is more heavily reliant on fossil fuels such as coal and natural gas, so EVs produce much higher indirect emissions. And according to research from the University of Toronto, in coal-dependent U.S. states such as West Virginia, an EV can emit about 6 per cent more GHG emissions over its entire lifetime—from initial mining, manufacturing and charging to eventual disposal—than a gas-powered vehicle of the same size. This means that in regions with especially coal-dependent energy grids, EVs could impose more climate costs than benefits. Put simply, for an EV to help meaningfully reduce emissions while on the road, its electricity must come from low-carbon electricity sources—something that does not happen in certain areas of Canada and the United States.

Finally, even after an EV is off the road, it continues to produce emissions, mainly because of the battery. EV batteries contain components that are energy-intensive to extract but also notoriously challenging to recycle. While EV battery recycling technologies are still emerging, approximately 5 per cent of lithium-ion batteries, which are commonly used in EVs, are actually recycled worldwide. This means that most new EVs feature batteries with no recycled components—further weakening the environmental benefit of EVs.

So what’s the final analysis? The technology continues to evolve and therefore the calculations will continue to change. But right now, while electric vehicles clearly help reduce tailpipe emissions, they’re not necessarily “zero emission” vehicles. And after you consider the full lifecycle—manufacturing, charging, scrapping—a more accurate picture of their environmental impact comes into view.