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Notes -
Canada’s decline
Things are not going well in Canada. The hashtag #Canadaisbroken has been going around for a while, but the scale of the decline remains underdiscussed, especially in our media. Canada’s real GDP per capita is 2.5% lower now than it was in 2019. In the U.S. its 6.0% higher. For decades, Canada has had per capita GDP (adjusted for purchasing power) that was about 80% of the U.S. level, now its 72% and falling. Canada is rapidly becoming a European country in terms of living standards. This understates the problem because in Europe its easier to live on less: cars are not necessary in many places and, crucially, rent is much lower. Canada is in the midst of an unbelievable housing crisis. At current prices and interest rates, the ownership costs of a typical home would consume 60% of the median household's income, the highest ever recorded. I went to the U.S. southwest recently and my overriding impression is how much better off America is than Canada now.
The Liberal government’s response to this has been deficit spending. Their lack of fiscal responsibility was dramatic during Covid, but hidden under the guise of emergency they spent $200+ billion on new entitlements and spending programs which has resulted in Canada running a permanent structural budget deficit. When combined with our provinces (which unlike U.S. states are allowed to borrow) and measured as a % of GDP, the country is running Bush Jr.-tier fiscal deficits without wars. And what are these new programs? Almost all of them are means-tested benefits for behaviours progressives like. A new daycare program aimed at moms working 9-5 jobs (i.e. white collar) that does nothing for SAHMs, a dental care program which is only for families making under 90k (creating a huge marriage penalty and implicit tax rate), a carbon tax rebate which is income redistribution in disguise, replacing the modest but universal child benefit with a generous means tested one, etc. If you put it together, Canada has largely rebuilt our 1970s welfare state but will claw it back from you more than dollar for dollar as you earn more. We variously incentivize poverty and moms to work, stay unmarried and put their kids in daycare. Our taxes are high.
The other big push from our government is immigration. They occasionally frame it as a way to stop inflation, but usually they don’t defend it at all and assume the pro-immigration consensus is unshakable. The levels were shocking last year, but they keep rising. Over just the past 3 months, Canada admitted 430,000 new people. Canada now has an absolute annual level of legal immigration (including temporary migration) of about 1.2 million -- higher than the United States. We get about 500,000 traditional immigrants, but the big change from recent years is about 700,000 net “non-permanent residents” who form a new helot class. Canada now has 2.5 million temporary residents who come to study or work low-paid jobs and it has rapidly transformed the entire country. These people represent 6% of the population, but because they are highly concentrated by age, they are about 20% of adults aged 20-40. I spend time in a small town that is hundreds of kilometers from any major city and nearly every store now employs temporary foreign workers from India. Every worker at McDonalds. Every worker at Tim Hortons. They live 6+ to an apartment and have tightened the rental market pricing locals out. With population growth running at its highest ever pace, homebuilding is unchanged at about 250,000 units creating an incremental housing need of a quarter million units per year. Rent inflation is over 7% compared with approximately 0% month over month in the US.
What the past few years has made plain to me is how deep leftism runs in Canada and how dedicated it is to ignoring the effect of incentives on behaviour: We can just subsidize bad behaviour and punish good behaviour endlessly without actually changing behaviour. In many ways Canada is running on the fumes of vestigial British earnestness, politeness and self discipline which has made this work in the past, but I think we’re rapidly burning up our cultural capital and once its gone, I think we’ll tip into a much worse equilibrium. I have leftist friends whose perspective is: “sure things aren’t great, but would the conservatives do better?” which makes me sad. For most people, even smart people like my friends, seeing the bad consequences of things they support doesn’t move the needle at all in terms of their worldviews. And I didn’t get into spiraling crime and government celebration of the deracination of our traditional culture.
I think part of what is happening is Anglo culture’s seemliness has become our greatest weakness. Its unseemly to ‘punch down’ and blame an avalanche of mostly-poor international students for the rental market, or permissive and ‘anti-racist’ criminal justice policy for a huge increase in crime so we equivocate and people say things like “its so brutal, how sad” while continuing to vote in the same way. There is no transmission from failure in office to electoral results, so we end up with people like Trudeau for three terms. One astute observation I’ve heard about Canadian ‘niceness’ is that its fake: people are very cagey about saying what they think in public about anything controversial. Our entire country is a university campus. Canadians live in a world of feel good pablum as our way of life is destroyed. People rage about it, but there is no honest sensemaking apparatus in Canada – because talking about things plainly is unseemly – so rage is dissipated randomly. Even today, even after its failures, the combined polling share of the LPC-led ruling coalition (i.e. LPC+NDP) is nearly 50%.
Canada deserves all this. The rod of consequences is a very effective teacher for those on whom the voice of reason has no effect. Canada decided as a country to subsidize shitty behaviour by taking from the productive class and did not listen when they were told this would lead to fewer productive people (relative to the counterfactual) and more shitty behaviour and proceeded with their misguided idea regardless.
Now they are eating the consequences of their beliefs as they have fewer productive people (lower real GDP per capita) as well as more shitty behaviour (no citation needed) and I have nothing to say other than "You deserve it" and a sincere wish they get it given to them good and hard.
The OP's comment suggests that nobody is really learning anything from where things are heading, thus, it's unlikely anyone's going to update hard once things accelerate out of control.
If you take a look at the top posts on /r/Canada right now, we have:
I didn't cherry-pick these. That's what's at front of mind for a lot of Canadians right now, as best I can tell, and I think people have already updated. If you look at the polls, the Conservative party has shot up to a clear projected majority starting in about September of this year.
/r/canada is not at all representative of the typical Canadian. It has the standard bias of most subreddits in being predominantly young, male, and left-wing, but it's also selected for being strongly anti-immigration. In fact, it's been absolutely obsessed with the issues of housing and immigration for the last few years. This goes back way before the pandemic or the housing crisis.
Years ago, it came out that one of the mods of /r/canada had some sympathy for white nationalism, and there was a big protest resulting in him and some other mods resigning and the creation of /r/onguardforthee, to which everyone who thought /r/canada was irredeemably racist fled, It's pretty popular and is now a more left-wing version of /r/canada that is much less opposed to immigration.
If you look at the top six posts there you have:
Only one about housing and not one about immigration. Some Canadians are definitely thinking about this, but that's not new for most of them, and as often as you see people on /r/canada blame immigrants, they'll blame things like foreign and corporate homebuyers and AirBnb.
The Conservatives have not said they would reduce immigration rate. Their support is due to something else. One cannot overstate how much of a bubble /r/canada is.
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A couple months ago I took this screenshot of the-then top posts for that day in /r/canada. Was an effective summary of the malaise we're in
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