How are Canadians and Americans doing?
Doctors and pollsters expect an honest answer to the common greeting, “How are you?” It asks about feelings. Economists, however, want to know about your material conditions.
So, how are Canadians and Americans doing economically?
A ranking of the 30 richest economies by the Union Bank of Switzerland reveals that average wealth—determined by dividing a country’s wealth by its population—is much higher in the United States than in Canada. The U.S. ranks second after Switzerland, while Canada lags, ranking 13th, a shade below Sweden but well ahead of Germany. However, when one examines median wealth—the middle point where half the adult population is worth more and half less—Canada ranks seventh while the U.S. ranks 28th, ahead of only Greece and Germany.
Probability suggests that a randomly selected Canadian is wealthier than a randomly selected American. A relatively small number of Americans have accumulated a lot of wealth while a much larger number possess much less. If we examine wage earners, only 10 per cent of Americans have done better than Canadians in the last two decades. Wealth and incomes are more equally distributed in Canada than they are in the U.S. And equality is a hallmark of a democratic society.
Another democratic hallmark is freedom, including the right to acquire and accumulate wealth. By that yardstick, the U.S. has been much more successful than Canada as it produces many more billionaires. Some Canadians yearn for that right, as is evidenced by the fact that more of them emigrate to the U.S. annually than Americans emigrate to Canada. This happens no matter who the American president is and what Americans think of him.
Despite forecasts of a recession earlier this year, Canada’s annualized growth in the first half of the year was more than double that of the U.S. Households in both countries complain about persistent cost-of-living pressures. Nevertheless, real wage gains in both countries have slightly outpaced inflation, but at a slightly higher rate in Canada since Donald Trump became U.S. president. Overall, not much difference.
Trump promised to reshore manufacturing jobs to the U.S., but every month of his presidency has featured a year-over-year decline in blue-collar jobs. The U.S. now has 75,000 fewer manufacturing jobs than when he re-occupied the oval office. While unemployment rates in both countries have remained relatively stable, they have inched up in the U.S. and down in Canada. This past July, Prime Minister Mark Carney claimed Canada was creating jobs at twice the rate of the U.S. Investment in new manufacturing capacity has decreased in both the U.S. and Canada since 2024.
Trump described tariffs as a miracle fiscal cure, but the U.S. debt is now over $40-billion while Canada’s fiscal room is the highest among its G7 peers. Bond yields are higher in the U.S., making mortgages and loans pricier, and while Canada’s bonds hold top-tier ratings from all three major credit ratings agencies, the U.S. does not.
Canada’s current flag-waving is a dramatically novel phenomenon. Trump’s tariff tirade and his talk of this country’s destiny as the 51st state changed everything. Public opinion was in a tizzy last year, as more than 80 per cent of Canadians worried about the impact of tariffs.
There appears to be less anxiety now. Last month, Nanos Research found Canadians in a brighter mood, more sanguine about their finances and job prospects, while pollster Spark reported the overwhelming majority thought it more important to get a good deal with the U.S. than to get a bad one quickly.
Rallying around the flag has gone hand in hand with rallying around the government, and with changes in party preferences. In last year’s election, the Liberals bested the Conservatives by two per cent. Now, they are ahead by double digits. Canadians think Carney has performed deftly in dealing with Trump. Carney wields the stronger political hand, but Trump commands superior economic clout as the U.S. economy is 12 times the size of Canada’s. To build economic independence from the U.S., Carney’s government has finalized four binding trade agreements and announced roughly 20 broader international economic deals, memoranda of understanding, and strategic partnerships.
Many beyond Canada hold Carney in high esteem. Anthony Scaramucci, Trump’s former communications director, recently told The Globe and Mail, “I don’t need to give [Carney] any advice on Trump. He should be giving the advice on Trump. I tell all the Western leaders that I come in touch with that Mark Carney should be your life coach. …Carney sort of forechecks [Trump] with his elbows.”
The Wall Street Journal describes Trump’s trade war as the “dumbest” in history. Canadians say they are prepared to endure more pain. Are Americans?
Nelson Wiseman is professor emeritus of political science at the University of Toronto.
The Hill Times