Canada finds itself in the throes of a scarcity crisis that threatens the very fabric of our socioeconomic and cultural tapestry. Plunging housing affordability, declining health-care capacity, surging infrastructure costs, and an economy that has stagnated on a per-person basis are not one-off challenges, but alarming indicators of a country teetering on decline. It is stirring a raucous national dialogue about the economy, and the paths ahead for our future.
Earlier this month, The Globe and Mail columnist Andrew Coyne laid out a sobering picture worth repeating: Canada is no longer one of the world’s wealthiest countries. Making the case that the economy has experienced a lost decade, it cited alarming facts, including that real GDP per capita—a measure of national income per person—retreated to levels last seen nine years ago. More alarming is the projection by the OECD that Canada will face the slowest per-person growth of its 38 members through 2060.
Bloomberg columnist Tyler Cowen refuted these concerns on Wednesday, pointing to growth in overall GDP and median incomes and making a compelling case for YIMBY policies to fix skyrocketing housing costs. He implied that Canadians should accept that we can’t produce the attractive jobs or industries that power growth like Americans can. Cowen argued that America will increase its relative lead “no matter what Canada does,” and we should be grateful for the benefits of American innovation. Hogwash.
Cowen’s idea of standard economic performance for Canada belies a generation of underperformance that we’ve accepted as normal. Once standing as the world’s sixth wealthiest country in 1981, Canada now ranks below the OECD median, outpaced by now wealthier peers. The country’s productivity growth, a measure that typically signifies fewer hours of work for equivalent or better income, ranked us as the second lowest over the same period. To bring matters home, in 1990, the median inflation-adjusted income for a single earner aged 25-54 in Toronto was $54,310. In 2023, it was $54,643, an increase of less than 1 percent in 34 years. Meanwhile, the inflation-adjusted costs of homeownership and rent have more than doubled. These facts point to the painful reality of our “zero-sum” economy, where one person’s gain spells another’s loss, a path fraught with potentially severe consequences if not rectified.
A generation of growth without growth
Nowhere is the shift to a zero-sum economy more acutely felt than in Canada’s housing market, where the fundamental dreams of homeownership and the possibility of starting a family have slipped beyond the grasp of most. Skyrocketing prices and soaring rents have entrenched a chasm between the property-owning class and those left floundering in their wake. In housing, older Canadians have effectively cannibalized the future wealth and prospects of the young, hoarding opportunities to maintain their own standard of living at their children’s expense. This compounds the myriad challenges already awaiting the next generation, including the weight of high public debt, aging infrastructure, the financial strain of supporting an increasingly elderly population, and the imperative to address climate change.
The crisis has been dramatically worsened by a constellation of policy blunders. Beyond a mismanaged temporary immigration system, a labyrinth of broken housing policies—marked by draconian land use restrictions, punitive taxation, and byzantine approval processes—is crippling our economy rather than buoying it. These misguided policies exacerbate the housing shortfall while applying intolerable pressure on our infrastructure. All of this occurs within a national context starkly devoid of the requisite economic growth to underpin or broaden the capacity of our systems.
A generation is now coming of age having only experienced an illusion of growth but never the real thing. Canadian cities are bustling with construction, governments are rolling out ambitious (and expensive) infrastructure projects, and housing-rich Canadians have experienced unprecedented gains in net worth that ultimately mask stagnation. This phenomenon, akin to “growth without growth,” reveals a troubling reality: Canada’s economy, propped up by population increases, is not translating into improved living standards for its citizens. This vicious cycle of policy failure and economic stagnation threatens to rip through the threads of Canada’s national identity.
Prolonged scarcity is dangerous territory
Growth is more than just a statistic. It signifies the potential for material well-being to improve across the board, fostering a climate of social trust in business, government, and community. Growth is the bedrock of win-win economic outcomes, where the general condition improves for the majority. Growth raises government capacity by increasing revenues per person without raising taxes. Growth raises capital for business investment without harming consumers. Growth creates competition for people, who benefit from higher wages and greater opportunities. Fundamentally, growth is the objective of optimistic cultures. But, when growth falters, as it has markedly done in Canada, it shifts societal attitudes towards a hoarding mentality. If allowed to fester, zero-sum thinking will erode the Canadian social contract, harm generosity, undermine faith in fairness, encourage anti-social activity (such as rent-seeking and corruption), and could lead Canada to a far uglier place.
The dangers of prolonged economic hardship are not unknown. Recent history offers stark lessons in the form of the Great Depression and post-First World War Weimar Germany, where scarcity led not only to material deprivation but to societal fractures that culminated in one of humanity’s ugliest genocides. While one should not sensationalize, prolonged periods of economic hardship create fertile soil for populists and extremists who capitalize on the pain of communities turned inward; scapegoating outsiders and succumbing to protectionism and nativism. Ugly politics supports ugly policies, which supports ugly politics, becoming a self-reinforcing cycle that is incredibly difficult to stop. Canada, despite its modern advancements, is not shielded from these forces and is not the only liberal democracy facing them.
This scarcity mindset has already led to an unsettling rise in nativism and xenophobia, with reported hate crimes more than doubling since 2015. Immigrants, once celebrated as the lifeblood of our economy, are increasingly blamed for our problems despite the reality that many have been exploited and offered false promises of achieving the Canadian Dream. Additionally, there’s growing intolerance towards marginalized communities, including the LGBTQ+ community, rising antisemitism, and a concerning number of Canadians adopting beliefs in conspiracy theories. These trends signal a decline in open-mindedness and serve as a potential harbinger for the adoption of fringe political ideologies and inward-looking perspectives in the future.
Shoppers walk past a boarded-up storefront in downtown Montreal, Dec. 19, 2023. Christinne Muschi/The Canadian Press.
Toward an abundance economy
Despite the current challenges, it is essential to remember that Canada remains an exceedingly wealthy nation, blessed with abundant natural resources, significant capital, strong trading relationships, and a highly educated population that is deeply integrated into the global talent pool. This wealth underscores the shock of our present stagnation, which derives not from external forces but the consequences of our own bad choices.
Zero-sum attitudes now riddle our political and economic discourse and fundamentally contradict the tenets of liberal democratic capitalism in Canada, which has historically championed a positive-sum worldview. A blueprint for Canadian prosperity is there should we choose to adopt it: it requires the melding of political and economic freedoms with security, safety, and opportunity, all underpinned by robust property rights, a welfare state that uplifts without stifling, and a government that facilitates rather than dictates.
The antidote to our challenges is to embrace an “abundance” mindset. This implies a political priority to ensure that the essentials for robust social health—such as housing, energy, health care, and transportation—are plentiful and give people options. Systemic reforms must address the housing crisis head-on, significantly boost productivity, and ensure that the basics—crucial for a high-quality life—are within everyone’s reach.
Achieving these outcomes demands leadership and bold action, including the possibility of the federal government devolving taxation powers to provinces in exchange for reforms. Such reforms should aim to eliminate interprovincial trade barriers, clarify jurisdictions, centralize regulatory frameworks, boost competition in Canada’s private sector, revamp land use and municipal governance, and reform the tax code. Furthermore, there’s an urgent need to overhaul public infrastructure procurement and construction practices, where poor state capacity has unnecessarily inflated the cost of building social and physical infrastructure. The challenge we face is not the magnitude of government expenditure but the extent of its overcomplication, overreach, and waste.
By weaving together the principles of liberal democracy with an ethos of abundance, Canada has the opportunity to rejuvenate its economy and reforge a path toward widespread prosperity. Crucially, immediate action is necessary to avert the onset of a negative feedback loop, where economic, social, political, and cultural downturns become intertwined and self-perpetuating. Canada’s potential future is beautiful, contingent on our collective desire and resolve to break out of this zero-sum economy threatening to hold us back. This future requires a collective commitment to dismantling systemic barriers that impede progress. Canada’s brighter tomorrow hinges on our willingness to reimagine and rebuild—a nation where success is common, prosperity is shared, diversity is celebrated, and everyone can thrive.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
