Why Is Canada So Poor?

[msj]

The U.S. national debt is smaller than Canada's when measured as a % of GDP.

Can you provide a link for this?

When I do some googling I come up with Canada falling below the US back in 2003-2004:

http://www.fin.gc.ca/budget06/bp/bpa1e.htm

Edited February 19, 2008 by msj

[geoffrey]

Pardon me MSJ... I looked at government debt in general, not just that of the Federal government (so, Federal, provincial and municipal).

You can find that here: http://en.wikipedia.org/wiki/List_of_count..._by_public_debt (referenced from the World Factbook)

Canada is 64%, United States is 36.8%. That's pretty consistant with the numbers I saw previously.

[msj]

Pardon me MSJ... I looked at government debt in general, not just that of the Federal government (so, Federal, provincial and municipal).

You can find that here: http://en.wikipedia.org/wiki/List_of_count..._by_public_debt (referenced from the World Factbook)

Canada is 64%, United States is 36.8%. That's pretty consistant with the numbers I saw previously.

Fair enough.

Given that net US federal debt exceeds 36.8% and given how they hide debt through the social security system, the wikipedia article is hogwash, imo.

I prefer the OECD numbers which at least admit to their failings:

http://www.oecd.org/document/25/0,3343,en_..._1,00.html#t_32

[White Doors]

Well if a country is getting put down then one says how they feel. I don't believe Canada is poor so I said so.

Canadians for a long time have taken their country for granted. We should be touting it greatness.

No we should stop taking it for granted and making it even better. We should be the richest nation on the planet by a long shot, but we are not.

Why?

[White Doors]

Well August 1991,

I guess you are not well traveled, particularly south of the 49th around the world to say what you did. Sure we have some road problems and this has been discussed before about -20°C and more and inadequate subsurface under our Can#1 as example. But I truly believe that Canada is by a good chunk richer then our fellow friends down south.

If you consider the accumulated deficit and current crisis in the US economy and banking system, I am glad (for a while until the US misery hits our economy) to live in Canada and like to stay if I can.

Please note, I am not a Canadian citizen, only landed immigrant, because I have not had the hard to give my citizenship away, yet, even so my wife and children are Canadians.

I have seen many part of the the World, including the US and I stay here! Because I love this country and its way of living and not telling the rest of the world what to do and when to do it.

Kind regards,

JK

Accumulated deficit? You mean the debt? Canada's debt still out weighs America's on a GDP basis.

Does that make us poorer or richer?

[msj]

Accumulated deficit? You mean the debt? Canada's debt still out weighs America's on a GDP basis.

Does that make us poorer or richer?

The problem, of course, is that neither Canada, nor the US, present proper financial statements.

If they did you would see something more like this kind of report:

http://www.shadowstats.com/article/50

If governments' didn't participate in deception maybe we would have less stories like this:

http://www.nbc11.com/news/15345539/detail.html

Edited February 20, 2008 by msj

[August1991]

The problem, of course, is that neither Canada, nor the US, present proper financial statements.

When you state "Canada", are you referring to the country or the government? And which government?

In either case, it makes little sense to present accounts as one would for an individual or a corporation. National accounts are fundamentally different from private accounts.

Given that net US federal debt exceeds 36.8% and given how they hide debt through the social security system, the wikipedia article is hogwash, imo.

One could equally argue that our provincial governments hide their debt through state medical insurance.

Future medical liabilities are completely unfunded. Any private insurance business that operated this way would be declared insolvent.

Edited February 20, 2008 by August1991

[margrace]

Those plants are not unionized, far more productive, have more satisfied employees and the companies pay less per employee. That's why they make money and the big 3 do not.

I know quite a few people who work at Honda, I only know one who is happy and he is high up in management. The only thing that keeps people at Honda is the high wages, like people everywhere they get into big debt and can't afford to leave. Honda has many lawsuits against them for mistreatment of employees but they manage to keep it mostly all out of the media. I have no love of the auto workers union from my exerience of doing payroll for some unionized plants but it still may be better for general employees.

[msj]

When you state "Canada", are you referring to the country or the government? And which government?

In either case, it makes little sense to present accounts as one would for an individual or a corporation. National accounts are fundamentally different from private accounts.

One could equally argue that our provincial governments hide their debt through state medical insurance.

Future medical liabilities are completely unfunded. Any private insurance business that operated this way would be declared insolvent.

When I say Canada I mean all government entities.

Oh, and there are rules under GAAP to deal with specific problems that would be associated with government entities.

Difference of entities is no excuse (or is a poor excuse) for maintaining an inadequate status quo.

It would be nice if all governments could give us taxpayers an idea of what promises to fund, say, pharmacare, today will end up costing us in the future.

Edited February 20, 2008 by msj

[geoffrey]

I know quite a few people who work at Honda, I only know one who is happy and he is high up in management. The only thing that keeps people at Honda is the high wages, like people everywhere they get into big debt and can't afford to leave. Honda has many lawsuits against them for mistreatment of employees but they manage to keep it mostly all out of the media. I have no love of the auto workers union from my exerience of doing payroll for some unionized plants but it still may be better for general employees.

No chance. The bottom line facts are that they are far more productive and cost much less. That's all that should matter. Buzz might get all teary eyed and sentimental for you, but that's not going to put bread on the table.

The autoworkers unions and their ridiculous demands have sunk their respective companies. Oh well. We can use them out West.

[msj]

I just spent time in the US - mostly the south: North and South Carolina, Georgia, Florida - but I also had a magnificent glimpse of Manhattan at night from the Brooklyn Bridge and I spent far more time than I wished in New Jersey . I was driving.

Returning to Quebec, I realized that Canada is poor. We're comparable to the poorest parts of South Carolina. (Before anyone starts Quebec-bashing, or South-bashing, I drove to the US through Ontario. IMHO, Ontario is poor compared to the US too. Hilton Head is not a poor place.)

Really just wanted to point out this link and this ridiculous thread started by this ridiculous post has given me the opportunity.

I wonder how driving through parts of Detroit would have altered your anecdotal perception.

[Guest American Woman]

Really just wanted to point out this link and this ridiculous thread started by this ridiculous post has given me the opportunity.

I wonder how driving through parts of Detroit would have altered your anecdotal perception.

Why did you want to point out that link? Detroit has suffered a lot; more than any other city in America.

[msj]

Why did you want to point out that link? Detroit has suffered a lot; more than any other city in America.

Two reasons:

1) That in the US (or any country for that matter) you can drive by rich areas and poor areas.

2) That the premise of this entire thread is ridiculous based on one person's alleged drive through parts of the US.

As I pointed out earlier in this thread - the originator of this thread wanted to avoid statistics because he would prefer to cherry pick his anecdotes based on his selective driving in the US.

Of course, when that doesn't work out too well then he tries to cherry pick his statistics, too...

[August1991]

I wonder how driving through parts of Detroit would have altered your anecdotal perception.

What are you trying to show with a house listing and a price of $100? That some land is cheap?

You buy a house, you buy some land. Lots of land in Canada is cheap too. Compare comparables, please.

----

I wanted to avoid statistics in this thread because I figured that many posters here don't like statistics and don't like to sift through them to decide what's accurate and what's misleading. If you want to debate statistics though, I'll be happy to do so. The stats are on my side.

Rather, I wanted to state what amounted to a general observation to see if I could find an explanation for the difference in standard of living. Make no mistake. Canada is a rich country. But the US is richer. Moreover, Canada should be the richer of the two. We have natural resources in abundance, respect for the fundamental institutions of market economies and the human and physical capital to achieve high production. Yet we don't, and we're well below our potential. It's noteworthy that our public infrastructure is particularly lacking. (Quebec has collapsing viaducts.)

IMV, Canadian governments fail Canadians. They tax us too much and spend the money on things we don't want. Canada's potential is wasted by politicians and bureaucrats. (I lived in Russia for several years and I saw the same result there - but on a far larger scale.)

Here's a little statistical anecdote to ponder:

But what's this I read that NB (pop. 760,000) has 55 MLAs. 55! And each one earns $60,000 per year plus a tax-exempt annual "office" allowance of $25,000. [Link]

What earth shaking decisions does NB face that require all that brain power? What heavy responsibilities justify that salary?

BTW, Maine with about 1.3 million people has about 150 members in its House. They each earn around $10,000 annually. [Link]

Edited February 29, 2008 by August1991

[msj]

What are you trying to show with a house listing and a price of $100? That some land is cheap?

You buy a house, you buy some land. Lots of land in Canada is cheap too. Compare comparables, please.

Why do I have to provide comparables?

I was just surfing the internet like you were driving in the US.

Ok, I admit my link, even if I did provide comparables to Canada, would be pretty stupid if I was seriously using it to paint in broad brush strokes that the US is poorer than Canada: hey, isn't that my point about this entire thread though?

The problem I have had with this thread from the outset is the sheer ridiculousness of the premise based upon the use of cherry picked anecdotes and, later, the use of cherry picked statistics.

[White Doors]

Fine, you find it ridiculous. It doesn't make it untrue though.

put aside your nationalism that won't allow you to discuss this logically and think about the subject.

[Rue]

I just spent time in the US - mostly the south: North and South Carolina, Georgia, Florida - but I also had a magnificent glimpse of Manhattan at night from the Brooklyn Bridge and I spent far more time than I wished in New Jersey . I was driving.

Returning to Quebec, I realized that Canada is poor. We're comparable to the poorest parts of South Carolina. (Before anyone starts Quebec-bashing, or South-bashing, I drove to the US through Ontario. IMHO, Ontario is poor compared to the US too. Hilton Head is not a poor place.)

Clearly your evaluation methods and analysis of what constitutes "poor" is flawed if not completely defective. To start with it appears to rely on your selective subjective observations of selected areas of the above. Id oubt very much you travelled to the inner city slums in any of the above places.

More to the point only someone living in a first world country taking his standard of life for granted would write such a thing.

Poor you say? Right tell that to people in the 3rd and 4th world. Tell that to aboriginal Canadians on certain reservations who live far lower a standard then you clearly know of.

Poor? When was the last time you were in Haiti, India, Bangladesh, Darfur, parts of East and West Africa, Indonesia, the Philippines, Nepal, on and on.

Poor?

Man oh man. get a grip.

[msj]

Fine, you find it ridiculous. It doesn't make it untrue though.

put aside your nationalism that won't allow you to discuss this logically and think about the subject.

This has nothing to do with nationalism. Nor is it related to outcomes.

The process used in an attempt to demonstrate whatever outcome August was trying to come up (and I admit that even this appears to narrow or broaden at his whim) is (to borrow from Rue) extremely flawed if not defective.

Clearly I think it was defective from the start.

[August1991]

Clearly your evaluation methods and analysis of what constitutes "poor" is flawed if not completely defective. To start with it appears to rely on your selective subjective observations of selected areas of the above. Id oubt very much you travelled to the inner city slums in any of the above places.

Rue, my definition of poor is not compared to some of the poorest countries in the world but rather to what our potential is or what we could be.

Since 1981, we have fallen further and further behind our neighbours to the south. True, we are better off now than in 1981 but we are not as well off as we should be.

Canadians are feeling more prosperous, and it's not an illusion.

Our natural resources are fetching higher prices and our dollar has strengthened.

Incomes are rising and everything from imported shirts to foreign travel and Florida real estate seem more affordable.

Yet we continue to fall behind our embattled southern neighbours in the value of our production of goods and services, according to a report to be published today.

Americans led us in production by about $8,800 per person in 2006, according to the Ontario-sponsored Institute for Competitiveness and Prosperity.

We were still ahead of other wealthy nations compared by the institute, if only narrowly in the case of the Netherlands.

But our output gap with the United States grew by $300 in a single year, and was $5,800 larger than in 1981, adjusted to the purchasing power of Canadian dollars in 2006.

"If Canada were successful in achieving its prosperity potential of closing the gap to its 1981 level ... the average household in the country would see an increase in personal disposable income of $7,800," according to the institute.

Toronto Star

Why is this? IMV, we have had too much "Liberal Party" style politics and economics, the Ottawa bureaucracy supposedly knows best. Well, it doesn't.

Here's a quote from a press release of the Institute:

Canada has one of the most prosperous and competitive economies in the world. But we are not living up to our full economic potential that would increase well being for ourselves and future generations.

...

Canada’s Gross Domestic Product (GDP) per capita ranks second among countries with a population greater than 10 million. GDP measures the value created by workers and firms from the human, physical, and natural resources in Canada. But against the United States, Canada continues to fall further behind. In 1981, Canada’s GDP per capita was $3,000, or less than 10 percent behind US GDP. Over the intervening years, the gap has widened and now Canada trails the US by $8,800, or 17 percent, per person.

This gap represents lost prosperity, which matters to all Canadians.

Link Edited April 2, 2008 by August1991

[Jerry J. Fortin]

This nation is poor because we have fallen into the capitalistic trap of the consumer society. We buy goods that are produced in abundance with the utilization of a cheap labour environment. We are poor because we are producing less valuable products and are digressing into a resourced based economy. You can paint it any color you want but it will still be pale in comparison to the nations with cheap labour. That is a fact.

It is of course very possible to overcome this problem, but it is against the interests of the multi-national corporations that play the game of produce and tax. We have the technology to do what needs to be done, but not the foresight to act on our own behalf. It is a sad commentary on our society.

[Zachary Young]

We weren't always so poor you know. In the fifties we had the second highest per capita income in the G8. Sadly, since that time we have walked down a path that is going to end with us as a third world nation. Why? I could give you a technical answer about capital consumption and the decline in savings but let's just sum it up in three words :

Bloated Welfare State.

What we need to do is abolish about 90% of the government and the taxes that are necessary to pay for it (income tax, GST, gas taxes). We can pay off our debt by selling the governments massive land holdings / crown corporations.

[BubberMiley]

Actually we're not poor at all. We're now more wealthy than Americans.

As of 2005, the median family in Canada was worth US$122,600, according to Statistics Canada, while the U.S. Federal Reserve pegged the median American family at US$93,100 in 2004. Those figures, the most recent available, already include an adjustment for our higher prices, and thanks to the rising loonie Canadians are likely even further ahead today.

http://www.macleans.ca/canada/national/art...625_50113_50113

[Smallc]

As a counter to this thread, a little perspective.

Macleans

What your eyes show you isn't always true.

Edited July 8, 2008 by Smallc

[August1991]

Smallc, I read quickly that Macleans article. Cutting through the sycophantic verbiage, I noted this:

The wealth numbers, in particular, are shocking. As of 2005, the median family in Canada was worth US$122,600, according to Statistics Canada, while the U.S. Federal Reserve pegged the median American family at US$93,100 in 2004. Those figures, the most recent available, already include an adjustment for our higher prices, and thanks to the rising loonie Canadians are likely even further ahead today. We're ahead mainly because Americans carry far more debt than we do, and it means that the median Canadian family is a full 30 per cent wealthier than the median American family.

...

The numbers show that our median household incomes are about the same, or at least they were back in 2005 when the most recent figures came out. That year the median household income in Canada was about US$44,300, after you adjust it for the exchange rate and our lower purchasing power, while the American median was US$46,300. Since then, the loonie has gained on the U.S. dollar, so we've likely narrowed the gap.

The average American family earns $2,000/year more but its estimated wealth is $30,000 lower.

Even if I took these numbers at face value (I don't), I'd take the income for the wealth.

-----

But Smallc, this wasn't my point at all in the OP. When I posted it, I was distressed at how poor Canada was compared to what it could be. Canada has everything any society in the world could hope for. We have all the natural resources that the world now wants (potash, oil, uranium, corn, hydro, gold, platinum, wheat, etc.) We have smart people who respect legal institutions that have existed for centuries. We are a civilized people with civilized, peaceable neighbours who wish us well.

In short, we Canadians have everything.

And yet, we are "poor". In school terms, we are underachievers, below potential. We are squandering our inheritance.

[Smallc]

Smallc, I read quickly that Macleans article. Cutting through the sycophantic verbiage, I noted this:

The average American family earns $2,000/year more but its estimated wealth is $30,000 lower.

Even if I took these numbers at face value (I don't), I'd take the income for the wealth.

-----

But Smallc, this wasn't my point at all in the OP. When I posted it, I was distressed at how poor Canada was compared to what it could be. Canada has everything any society in the world could hope for. We have all the natural resources that the world now wants (potash, oil, uranium, corn, hydro, gold, platinum, wheat, etc.) We have smart people who respect legal institutions that have existed for centuries. We are a civilized people with civilized, peaceable neighbours who wish us well.

In short, we Canadians have everything.

And yet, we are "poor". In school terms, we are underachievers, below potential. We are squandering our inheritance.

I really don't see how you can call up poor. I traveled across the midwest and i didn't see anything that made me think that the US was so much richer than Canada, that American cities were better than Canadian ones. Its all quite subjective really.