Fraser Institute data reveals Canada's income gap with the US has more than doubled since 1999
The gap in living standards between Canada and the United States has more than doubled over the past quarter century, with Americans now earning a GDP per person that exceeds Canada's by CA$23,757. That's a structural widening that carries real consequences for household incomes, purchasing power, and the borrowers that mortgage brokers serve.
The findings came from a new study by the Fraser Institute, a Vancouver-based independent, non-partisan Canadian public policy think tank. Squandering the Canadian Century Part 1: Comparing Economic Performance in Canada and the United States was co-authored by Jake Fuss, director of fiscal studies at the Fraser Institute, alongside senior policy analyst Grady Munro and economist Joel Emes.
In 1999, inflation-adjusted GDP per person in Canada stood at CA$48,076, against CA$58,842 in the United States, a gap of CA$10,766.
By 2024, Canada's figure had grown modestly to CA$59,529, while the United States reached CA$83,286, stretching the divide to CA$23,757.
Across all five economic indicators examined — living standards, incomes, employment, business investment, and productivity — Canada trailed the United States on every measure.
Investment collapse driving the productivity divide
The productivity data illustrate the scale of the divergence most sharply. Labour productivity in the United States expanded by 67.9% between 1999 and 2025, compared with just 26.7% in Canada over the same period.
Business investment per worker fell from approximately 90 cents per Canadian dollar invested by the United States in 2007 to just 54 cents by 2024.
Canada's well-documented struggle with business investment and productivity growth has been identified by major bank economists as a structural threat to household income and long-term prosperity.
"The ability to transform raw materials and other inputs into demanded goods and services increased by more than a factor of 2.0 in the US compared to Canada, which explains much of our languishing living standards," said Fuss.
Francis Fong, managing director and senior economist at TD Bank in Toronto, previously said that "past efforts of tax and regulation reform have failed to meaningfully reduce compliance burdens and promote economic and business dynamism — a must to seriously address the root causes of Canada's ailing productivity."
Mortgage brokers face income-squeezed clients
The inflation-adjusted median employment income gap between the two countries stood at CA$6,126 in the United States' favour in 2010, and widened to CA$8,663 by 2024. That compression in relative earnings intersects with elevated home prices across Canada's major markets.
The widening wealth and income divide among Canadian households has been flagged by Statistics Canada as a compounding risk for borrowers entering or renewing in today's mortgage market.
"When comparing the economic performance of Canada relative to the US since the beginning of the 21st century, it's abundantly clear that Canadian policymakers have failed to create an environment where we can prosper," said Fuss.
Canada's private sector employment also contracted as a share of total employment, falling from 81.2% to 78.5% between 1999 and 2024, as government-sector positions expanded.
The United States moved in the opposite direction, with private sector employment climbing from 85.8% to 86.5%.
"After squandering the first quarter of the 21st century, it's up to policymakers in Canada to enact bold economic reforms to make the most of the rest of this century," said Grady Munro, senior policy analyst and co-author of the study.
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