Something IS Wrong

It's not just you. It's the Economy.

Louis C.K. famously joked, “Everything is amazing and nobody is happy”. It’s a great bit. But the joke turns the notion that we should be happy because of the stuff we have access to. The truth is Louis C. K. is a deeply unhappy man and he very well knows that amazing stuff does not equal happiness.

Do you feel like something's wrong economically?

Do you feel that despite everything growing around us—new businesses, bustling developments, a gridlocked downtown (nobody goes there anymore, it’s too crowded), and a higher population—life seems a little harder than it was five or ten years ago in spite of all your work and everything you’ve done? You’re not alone.

Economics is the story we tell ourselves about where our wealth comes from and where it goes. Our story telling skills in this area are not good.

GDP, or Gross Domestic Product, is supposed to be a measure of prosperity. When it grows, everything is supposed to get better. GDP is the one number that defines modern economics and government achievement. Government and media often simplify this concept with:

Growth = Prosperity

Growth = Progress

Growth = Purpose

But these equations don't add up. Robert F. Kennedy famously criticized GDP as a flawed measure, noting that it "measures everything, in short, except that which makes life worthwhile."

Even if we accept GDP as a rough guide, there's a bigger problem: the per capita calculation - GDP Per Capita… economic product per person.

GDP measures the total economic output, but this total must be divided among all the people. If the population grows faster than the economy, the slice of prosperity each person gets shrinks. This is exactly what's happening in Nova Scotia.

Halifax is consistently among the fastest-growing cities in Canada and by extension the developed world.

In 2024, GDP per person in Nova Scotia will be substantially lower than it was a decade ago. Statistics Canada data shows that real GDP per capita took a sharp downturn in 2023, returning our quality of life, as measured by GDP, to little better than 2014 levels. The reality, in the spirit of RFK, is much worse. With record-breaking immigration and slower GDP growth, the situation will worsen this year and for years to follow.

Nova Scotia already has the lowest GDP per capita in North America and much of the Western world, and things are about to get even more challenging.

For a deeper analysis of exactly where and how this all went so wrong you might like to read Fred McMahon’s report on Catching Up and Falling Behind in the Maritimes.

It’s also worth noting that, not unrelated to this, Nova Scotia has the biggest government relative to GDP in Canada… and with Canada’s incredibly inflating government that is REALLY saying something.

Nova Scotia’s Population Is Booming, But It’s Economy Isn’t

Nova Scotia’s population has recently grown at an unprecedented rate. Statistics Canada estimates a 2.8% increase to 1.07 million people in 2023. Adding 30,000 people in a year is no small feat. However, our economy didn't keep pace. Real GDP advanced only 1.3% in 2023, less than half the rate of population growth. On a per capita basis, this represents a decline of 1.4% last year alone, placing real GDP per capita at the lowest level since before 2016 and this year will be worse still.

The OECD predicts Canada will see the lowest real GDP per capita growth among advanced economies over the next four decades, and Nova Scotia will be at the bottom of that list, assuming the unenviable position Greece held in the 2000s.

Surviving Despite the Odds

The question isn't "Is something wrong?" but rather, "How are we even surviving?" The answer lies in our incredible capacity to generate wealth almost in spite of ourselves. But every economic system has its limits, and we’re pushing ours.

Now What?

Canada, and Nova Scotia, must return to the sane immigration policies that served us well for the last century, making us the envy of the world rather than a petulant child on the world stage. We have to stop and begin again with new understanding, new goals, and new measures of Prosperity, Progress, and purpose.

Our path forward must focus on creating a balanced equation where growth benefits everyone. It’s not just about adding more people but ensuring that each person's life improves as our province expands. Only then can we truly claim a sense of purpose, progress, and prosperity.