Higher incomes require faster economic growth: Philip Cross in The Financial Post

This article originally appeared in the Financial Post. Below is an excerpt from the article.

By Philip Cross, July 17, 2026

Canada’s economic growth has decelerated markedly. We have just lived through the worst decade for real GDP growth per person since the Great Depression, almost a full century ago. Over the last 10 years, real GDP per capita increased just 0.6 per cent a year on average. That’s markedly less than its high of nearly 4.0 per cent a year in the early 1970s, and below an extended period of 2.5-per cent per year growth at the turn of the 21st century.

Since 2010 the 10-year average of annual growth has been consistently below 1.0 per cent. Before that, the only 10-year periods when growth averaged less than 1.0 per cent a year were those ending in 1996 and 1997. In both those years, decadal growth was just 0.9 per cent.

GDP matters mainly because household disposable incomes closely track its growth. Since 1961, per capita real GDP is up 209.1 per cent and per capita real disposable income up 222.4 per cent. Disposable incomes briefly lagged GDP in the 1990s, as employment recovered slowly from the recession of the early part of that decade and governments kept taxes high as they struggled with high debt levels.

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