Canada's Future

[Acajack]

How do you see Canada in 10, 25 or 50 years?

Our economy?
Our cities?
Our quality of life?

And how will it compare to the past 10, 25 and 50 years?

[WhipperSnapper]

All depends. This past decade has been one if not the worst for Canada in comparative international rankings. The effects plus continued erosion of our standing will be felt more and more. Much of that has to do with qualitative immigration to meet questionable growth targets. One example, we don't immigration caps on countries/regions to encourage diversity. Our overall intake of immigrants, temp visas, refugees, etc. is dominated by one small region and that will only get worse as our global standing deteriorates further. Or, everyone but the absolute desperate will pass over Canada.

Will common sense prevail or will Canadian heart strings continue to blind them?

[Acajack]

One thing I've been thinking is that for people my age (in my 50s), Canada has been very close to or even at times ahead of the US in terms of standard of living for most of our lives.

This isn't actually how things have been historically. Canada has generally been clearly a couple of notches below the US in terms of prosperity throughout most of its history.

I think all the signs are there that we will go back to the historical normal where we're quite a bit behind them.

This type of situation has all sorts of effects on Canadian society of course.

I was also thinking of it in terms of an Australia-New Zealand relationship.

I always assumed that NZ was further back from Oz than we are from the US.

But NZ GDP PPP is 80% of Australia's. Our is 70% of the US' GDP PPP.

[whatnext]

Originally Posted by Acajack

How do you see Canada in 10, 25 or 50 years?

Our economy?
Our cities?
Our quality of life?

And how will it compare to the past 10, 25 and 50 years?

Shittier.

[MolsonExport]

The United States has a disproportionate number of people with extremely high incomes/wealth (along with a disproportionate number of people stuck in grinding poverty) which means that crude comparisons (GDP per capita) are not particularly helpful.


EVERY TIME I visit the USA, I am stuck by just how much wealth there is, and how much gut-wrenching poverty there is. Easily the most inegalitarian country of all big industrialized countries.

[Innsertnamehere]

Wealthier.
More Populous.
About the same Quality of Life, better in some areas, worse in others.

In terms of where I see the GTA going, I think it's going to become increasingly congested and difficult to travel through. There will be significant shifts to transit, but mostly because driving will become hilariously congested and futile. Transit service will improve but still generally not be particularly useful for most trips, especially outside of Toronto. Capital spending on transportation infrastructure, while vastly improved from the 1990's-2010's period, will continue to fail to keep up with growth and thus transportation will continue to deteriorate.

Toronto will become increasingly unaffordable and a place for the wealthy. I just don't see any sign of the significant changes we need to make to improve housing affordability - if anything, it just keeps getting worse. I do think we will see a shift in construction patterns back to low-rise housing to a small extent over today, but not a significant shift. As a whole I expect a lot of growth to be pushed out of the GTA as a result as people flee the city in mass to areas which offer greater affordability. The city will increasingly become similar to NYC - a centre of great wealth and prosperity, but not one where people typically go to live the "nuclear family" lifestyle.

People's incomes will also continue to increase though, and the city will be wealthier than it ever has been with more amenities and attractions than ever.

I think we will see Canada transition to a more dispersed economic model than today - seeing the Maritimes explode in population is a sign of the post-COVID world, I think. In Ontario, growth will spread all across the province more than it has in the past.

I suspect we will trail the US economically for another decade or so, but US federal debt will eventually catch up with them and they will enter an extended period of slower growth after decades of break-neck growth, allowing Canada to catch up a bit. We have always yo-yoed with the US and are at the bottom of one such yo-yo right now, I think.

Right now it's easy to look negatively at Canada as we are at the bottom of a recession and are still trying to shake of economic impacts of COVID. It will pass. In another decade things won't look so negative.

[P'tit Renard]

Originally Posted by WhipperSnapper

All depends. This past decade has been one if not the worst for Canada in comparative international rankings. The effects plus continued erosion of our standing will be felt more and more. Much of that has to do with qualitative immigration to meet questionable growth targets. One example, we don't immigration caps on countries/regions to encourage diversity. Our overall intake of immigrants, temp visas, refugees, etc. is dominated by one small region and that will only get worse as our global standing deteriorates further. Or, everyone but the absolute desperate will pass over Canada.

Will common sense prevail or will Canadian heart strings continue to blind them?

My sentiments exactly. My 2015 self would have had a hard time imagining Canada falling this far, but now it's almost a certainty that we'll see a Seine-Saint-Denis scale slum pop up in the GTA (though here it's in the form of dilapidated basements and crumbling crowded private condos/apartments in unsightly suburban sprawl). UK style race riots are now in the cards as well within the decade.

We're also planning future retirement with the view that the Canadian public healthcare system will collapse and won't be available for us to access when we need it. We'd wager that Canada will fail to implement any strategic healthcare reforms, meaning we'll likely be stuck with a US style system instead of a coveted European/East-Asian style healthcare system.

From an economic standpoint, we think it's unlikely that Canada will take the radical reforms needed to ween itself off its addiction to high housing prices. The real estate ponzi scheme will continue to cannibalise other sectors of the economy, and there's going to be a protracted and painful reckoning when the RE and private household debt bubble unwinds. The popping of this super bubble will devastate household incomes and set Canada back for at least a decade.

We can also see wealthy and top-talent Canadian immigrants (including the ones who have already built a life here) increasingly decide to emigrate due to the deteriorating domestic situation here, and the more attractive higher quality of life (also better weather!) in other countries who are competing for the same pool of talent and wealth. For instance, wealthy Chinese these days are more interested in relocating to Japan than Canada, and we only see that trend accelerating as Canada's value proposition keeps declining.

[Acajack]

Originally Posted by MolsonExport

The United States has a disproportionate number of people with extremely high incomes/wealth (along with a disproportionate number of people stuck in grinding poverty) which means that crude comparisons (GDP per capita) are not particularly helpful.


EVERY TIME I visit the USA, I am stuck by just how much wealth there is, and how much gut-wrenching poverty there is. Easily the most inegalitarian country of all big industrialized countries.

Of course. Though the allure of the US isn't for Canadians who would join the lower rungs of society down there. It's for the middle classes and above and that's where the US is a very attractive place to move to and something that will sting a lot more if many more skilled Canadians start heading south.

It's been a very long time since working class Canadians have left in appreciable numbers for work in the US, like New Zealanders who not that long ago would leave in decent numbers to work in for example big box stores like Bunnings warehouses in Australia.

But we don't need that to happen in order for the growing gap to become problematic for us.

[kool maudit]

Still, the original point concerned the fairly recent divergence between Canada and the US, and it's not as though the latter was a dramatically more egalitarian society in 2012 or 2014.



The 2010s just weren't great for Canada. We fell behind the (non-Norway) Nordics as well, after being ahead for a few decades.

[LeftCoaster]

What are those charts?

GDP per capita? Median income?

[Innsertnamehere]

I believe the first one is GDP per capita.

If you look at it, in 2000 the US GDP per Capita was 1.5x that of Canada.. in 2020, it was 1.46x.

We aren't that far off normal and the gap is not unprecedented.

If in the next decade the US economy slows down (like it did in the 2010's) and Canada's continues to chug along or even accelerates due to increased resource extraction.. The gap will close.

Ultimately the early 2010's with Canada passing the US was an anomaly too, and had more to do with the US economy being in the dumpster than the Canadian economy being on fire.

Part of the discrepancy in the US GDP numbers are also that GDP per capita is compared in $USD - which gives a home country bias, especially during periods of strong currency variation. Right now the CAD is sitting on it's lower end, which means our GDP looks worse than it may actually be on a PPP basis.

Honestly, I have a sneaking feeling that the latter half of the 2020's will see the gap return closer to the mean.

[kool maudit]

Originally Posted by LeftCoaster

What are those charts?

GDP per capita? Median income?

Sorry, yes -- GDP per capita.

[drew]

I was just in the States for a week, and most everything I saw at stores was priced very close to what we see in Canada. For groceries, the only thing I found (at Target and Walmart) that were noticeably cheaper than Canada was cheese (not by a lot) and milk (50% cheaper for a gallon/4 litre jug). Honestly, Americans should be coming across the border to grocery shop, they would win bigly on the exchange.

They still win big time on new vehicle prices and gas, and in some areas, house pricing.

[P'tit Renard]

Originally Posted by Innsertnamehere

If in the next decade the US economy slows down (like it did in the 2010's) and Canada's continues to chug along or even accelerates due to increased resource extraction.. The gap will close.

Is the Canadian economy chugging along on fumes of delusion?

Doesn't jive with the OECD's prediction that Canada will be the worst performing advanced economy for the next 3 decades, given the realities of current Canadian government policies.

[Acajack]

Originally Posted by Innsertnamehere

Toronto will become increasingly unaffordable and a place for the wealthy. I just don't see any sign of the significant changes we need to make to improve housing affordability - if anything, it just keeps getting worse. I do think we will see a shift in construction patterns back to low-rise housing to a small extent over today, but not a significant shift. As a whole I expect a lot of growth to be pushed out of the GTA as a result as people flee the city in mass to areas which offer greater affordability. The city will increasingly become similar to NYC - a centre of great wealth and prosperity, but not one where people typically go to live the "nuclear family" lifestyle.

People's incomes will also continue to increase though, and the city will be wealthier than it ever has been with more amenities and attractions than ever.

I tend to agree with this vision of Toronto's future but the city will still need people doing the less well paid jobs to keep itself running.

I don't think Canada as a North American society has the socio-economic structure to pay these people disproportionately high wages (relative to their skills) like you see in some other affluent parts of the world.

These employees are still going to have to live somewhere, which may mean those Seine-St-Denis type of places that P'tit Renard is always referring to, coming to parts of the GTA sometime sooner than later.

[Acajack]

When I go to the US I notice that upper middle class areas similar to the one I live in in Canada are more affluent: the cars are more expensive models, houses have more state-of-the-art gadgets, people are more likely to have more expensive recreational toys like boats, large RVs, etc., the nearby shopping areas are posher, etc.

Not shockingly so, but still a notch or two above what I experience in Canada.

Of course as has been stated the poorer areas are way shittier than poor areas of Canada. Though I'd no longer say that there are *almost no shitty* areas in certain Canadian cities. Something which you used to be able to claim about, say, places like Ottawa or maybe London ON, without exaggerating that much.

[kool maudit]

I also notice that in the US. Upper-middle-class America has pulled noticeably ahead.

In Norway and Denmark, conversely, you notice that the lower-middle segment is comparatively quite a bit smaller than in Canada.

[Build.It]

The three big levers are interest rates, immigration and natural resources.

If interest rates trend up over the next 25-50 years (which I suspect they will) that will correct real estate.

If we make it easy for companies to extract and sell natural resources, then that'll boost incomes and GDP.

If immigration continues to outpace housing that'll be a problem, but if regulations are loosened then immigration will be a massive boost.

[MonkeyRonin]

The longer term is of course impossible to predict, but the immediate short turn - say, the next 10 or so years - does not look like it'll be a great time for us.

Dealing with our housing issues alone could take decades to fix - and that's only if (and it's a big if) it's actually treated with a meaningful sense of urgency. A few token affordable developments and secondary suites just won't cut it anymore.

Unfortunately that's not our only problem. Our per capita GDP is back down to 2013 levels (and falling). Just digging ourselves out of that hole and getting back to 2019-level prosperity is no small task, given our systemic issues relating to lagging productivity, uncompetitive oligopolies, conservative business culture, underbuilt infrastructure, and bureaucratic red tape. Too much of our economy is now tied up in unproductive real estate, and getting ourselves untangled from that will be painful - but necessary in the long term. It's for good reason that the IMF has predicted us as being the slowest-growing OECD economy for the next several decades.

And then at the same time as our economy flounders, we have to deal with an aging population and growing strain placed on healthcare and pensions.

Meanwhile, the prospective crop of up-and-coming political leaders is anything but inspiring, and our best & brightest are leaving at an accelerating pace. Not sure that there's anyone up to the task to leading us out of this - because the Trudeau/Poilievre/Singh style of performative politics certainly won't.