Canada's income growth lags U.S. sharply since 2014, widening wage gap

Canada's economic troubles predate any tariff discussions, according to a Fraser Institute analysis comparing Canada-U.S. performance across the first quarter of the 21st century.

The gap in per-person GDP between the two countries has nearly doubled since 1999. In 1999, Canada's per-person GDP (inflation-adjusted) was $48,076 compared to $58,842 in the U.S. — a difference of $10,766. By 2024, Canada's per-person GDP had reached $59,529 while the U.S. had climbed to $83,286, widening the gap to $23,757.

But the divergence accelerated sharply after 2014. From 1999 to 2014, Canada's per-person GDP grew 19.9 per cent while the U.S. grew 17.8 per cent — Canada slightly ahead. From 2014 to 2024, however, Canada grew just 3.2 per cent while the U.S. grew 20.1 per cent.

Median employment income tells a similar story. From 2010 to 2024, Canadian median income rose from $32,580 to $37,361 — a 14.7 per cent increase. U.S. median income grew from $38,706 to $46,024 — an 18.9 per cent increase. Early in that period, from 2010 to 2014, Canada actually outpaced the U.S., with 5.2 per cent income growth versus a 0.5 per cent decline in the U.S. But that trend reversed entirely in the second decade.

Business investment per worker has also deteriorated. In 2007, Canadian business investment per worker stood at 90 cents for every dollar invested in the U.S. By 2014 it had slipped to 87 cents. By 2024, it had fallen to 54 cents.

The Fraser Institute, a think tank that advocates free-market policies, argues these figures demonstrate structural economic challenges that predate recent trade tensions.