Canada's Economy in "Generational Collapse"
Investor Eric Jackson is sounding the alarm on what he calls a "generational collapse" of Canada's economy relative to the U.S. He points to stark data: Canadian GDP per capita has fallen to just 67% of America's, Ontario is now poorer than 43 U.S. states, and 71% of top software engineering graduates are leaving the country. The analysis highlights a severe brain drain, low R&D spending, and a flight of foreign direct investment.
The widening economic gap between Canada and the United States is the largest it has been since the Second World War, according to University of Calgary economist Trevor Tombe. The purchasing power of Canadians relative to Americans has been on a near-continuous decline since 1980. A primary driver of this divergence is chronically weak business investment, which has been so low since 2015 that the amount of capital per worker is falling. In 2025, Canadian workers were expected to receive only 55 cents of new capital for every dollar invested in their American counterparts, hindering productivity and wage growth. This investment deficit extends to innovation, with Canada's R&D spending as a percentage of GDP trending downwards for two decades, in contrast to other G7 nations. In 2023, R&D expenditure was 1.7% of GDP, with Canadian businesses contributing a far smaller share of R&D than the OECD average (52% vs 71%). The talent exodus goes beyond software engineering, with about one in four STEM graduates from top Canadian universities now working abroad.
