LILLEY: Canadians shouldn’t accept a lower standard of living

Authors: Brian Lilley

Publisher:

torontosun

Published: 10/30/2025

Language:English

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Elon

Good morning Norris, I'm Elon, and this is Goose Pod for you. Today is Friday, November 07th.

Taylor Weaver

And I'm Taylor Weaver. We're here to discuss a critical topic: Canadians are being told to accept a lower standard of living, and that’s a narrative that needs a rewrite.

Elon

Exactly. The alarm bell is coming from the top. Bank of Canada Governor Tiff Macklem warned that unless something fundamental changes, our incomes will be lower. This isn't a drill; it's a direct challenge to our national trajectory and our ambition.

Taylor Weaver

It’s a stark contrast to a different time, isn't it? I was thinking about what was ordinary for a working family in the 1980s, a house, a car, maybe a modest vacation. Those things feel like significant luxuries now, not the baseline of a stable life.

Elon

That’s the core of the problem. Stagnant wages versus skyrocketing costs. Macklem is pointing out that the engine is failing. We need a massive boost in productivity, not just incremental tweaks. The goal isn't to manage a decline; it's to engineer a resurgence.

Taylor Weaver

So, the story isn't just about economic metrics; it's about the erosion of a promise. The promise that the next generation would be better off. Macklem’s warning is the plot twist that says the story could have an unhappy ending if we don't change the script.

Elon

To change the script, you have to understand the old one. Canada's economy was built on the "Staple Thesis", right? We sold our natural resources, from fur to timber to oil, to the world. That was the foundation of our wealth for centuries. It worked, for a while.

Taylor Weaver

It's a very straightforward narrative. We have abundant resources, and we have a massive market next door in the United States. Our geography and our resources shaped our entire economic story. We built railways and highways to move these goods, connecting the provinces into a single economic unit.

Elon

But that model is obsolete. While we were coasting on resources, our productivity collapsed. We’ve fallen from the 6th most productive OECD economy in 1970 to 18th. We’re now at just 71% of U.S. productivity. This isn't a slowdown; it's a national emergency.

Taylor Weaver

And that old model created its own internal problems too. We have provinces acting like separate countries with internal trade barriers. These are estimated to be as damaging as a seven percent tariff on our own goods. It's like we built a national economy and then put roadblocks on every highway.

Elon

It's completely illogical. We're fighting for market access abroad while strangling our own economy at home. The entire structure is flawed. We're too reliant on housing and consumption, not on building high-value industries. The foundation itself needs to be rebuilt with technology and innovation.

Elon

And this weakness is most obvious in our biggest conflict: trade with the United States. Our response to Trump's tariffs has been, frankly, embarrassing. It's counterproductive. We seem trapped in a political mindset that prevents us from negotiating effectively. There’s no bold, strategic vision.

Taylor Weaver

Well, the strategic reality is that 75% of our exports go to the U.S. When Prime Minister Carney’s government floated a 3% digital services tax, the threat of a trade war was immediate and existential. They had to weigh standing up to Trump against a potential economic catastrophe.

Elon

So we capitulated. We reversed the tax just hours before it took effect. That's not strategy; that's reacting. It shows a lack of leverage and a failure to build a resilient economy that isn't completely dependent on an unpredictable neighbor. We need to dictate terms, not just accept them.

Taylor Weaver

It’s a classic case of being caught between a rock and a hard place. Carney campaigned on standing up to pressure, but the economic story of our deep integration with the U.S. was more powerful. The decision was framed as pragmatic, but it certainly read like a retreat.

Elon

Pragmatism has a price. The real-world impact of this uncertainty and weakness is undeniable. Our GDP contracted 1.6% in the second quarter. And look at business investment, the key to future productivity. For every dollar a U.S. worker gets in new machinery, a Canadian worker gets just 32 cents.

Taylor Weaver

Those numbers tell a story of falling behind. It translates directly to people’s lives. We've seen significant job losses, 22,700 in transportation and 19,200 in manufacturing in just one month. Businesses are on the sidelines, with minimal hiring and investment because the future is so uncertain.

Elon

It's worse than just falling behind. We are rusting out while they are tooling up. We aren't giving our workers the tools they need to compete and win. This isn't just an economic cycle; it's structural damage that's actively reducing our country's productive capacity.

Elon

And the future forecast is unacceptable. The OECD projects Canada will have the weakest per-capita economic growth among all advanced economies for the next four decades. This isn't a future we should ever accept. We need to aim for the top, not resign ourselves to the bottom.

Taylor Weaver

The projections are troubling, with growth averaging just 0.7% annually for the rest of this decade. While there’s a hope for a modest pickup in 2026, the overall story is one of stagnation. The entire path for our GDP is lower than it was before all this trade disruption.

Elon

That's the end of today's discussion. Thank you for listening to Goose Pod, Norris. See you tomorrow.

Canadians are urged not to accept a lower standard of living. The Bank of Canada warns of declining incomes due to stagnant wages and rising costs. Canada's reliance on natural resources and internal trade barriers hinder productivity, causing it to fall behind the U.S. Urgent action is needed to boost innovation and rebuild the economy for future prosperity.

Read original at torontosun →

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CanadaColumnistsLILLEY: Canadians shouldn't accept a lower standard of livingBank of Canada Governor Tiff Macklem is warning we will all be making less if things don't change. Get the latest from Brian Lilley straight to your inbox Published Oct 30, 2025 • Last updated 1 day ago • 3 minute read You can save this article by registering for free here.

Or sign-in if you have an account.Tiff Macklem, Governor of the Bank of Canada, holds a press conference at the Bank of Canada in Ottawa on Wednesday, Oct. 29, 2025. Photo by Sean Kilpatrick /THE CANADIAN PRESSFirst it was Prime Minister Mark Carney saying that young people would need to sacrifice, now it’s the head of the Bank of Canada warning of a lower standard of living.

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Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsIn fact, that was the point that Bank Governor Tiff Macklem was making on Wednesday. Macklem was talking about the impact of tariffs and American protectionist policy on Canada’s economy.

“Unfortunately, what that means is that unless something else changes, our incomes will be lower than they otherwise would be,” Macklem said. There are people taking this to mean that Canadians should simply get used to making less money, having a lower standard of living. That’s not the case at all.

A key part of his statement was, “unless something else changes” we will have lower incomes. Macklem made clear that the kinds of changes we need can’t be handled by the Bank of Canada. It’s up to the federal government and Canada’s business community. Your noon-hour look at what's happening in Toronto and beyond.

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“These are more structural changes. I mean, fundamentally, as the senior deputy governor has hammered many times, we need to get our productivity growth up. And if we can do that as a country, we can bend that curve up,” Macklem said. Canada has been falling behindCarolyn Rogers, the senior deputy governor, has been calling for Canada to make structural changes to our economy to boost productivity and incomes for years.

She recently called for more competition in Canada’s banking sector, in other areas of the economy and in breaking down barriers between provinces which still persist. “Higher productivity won’t make Canada immune to US trade policy, but it would help buffer the effects of tariffs. And it’s the clearest path to boosting real wages, making life more affordable,” Rogers said in Toronto recently.

This advertisement has not loaded yet, but your article continues below.Isn’t that what we should all want? Real wage growth and the thriving economy should be the central focus of all governments at the moment, but it’s not. In the United States, the GDP per capita is over $89,000 USD, in Canada it’s just about $55,000 USD.

When comparing states and provinces, it gets even worse, with Ontario the supposed economic engine of the country coming in with a GDP per capita of $53,000 USD, just ahead of Mississippi, the worst performing American state at $51,000. That’s a massive difference and it shows up in real wages too with the average Canadian working full-time earning the equivalent of less than $48,000 USD per year compared to roughly $65,000 USD for an American.

By not boosting productivity, we are robbing ourselves. This advertisement has not loaded yet, but your article continues below.We need to move fast to turn this aroundIn his pre-budget speech last week to university students, Prime Minister Mark Carney wasn’t exactly lifting spirits or expectations that things can turn around.

“I will always be straight about the challenges we have to face and the choices we must make,” Carney said. “To be clear, we won’t transform our economy easily or in a few months — it will take some sacrifices and some time.” That’s a far cry from his election rallying cry. “We will need to think big and act bigger.

We will need to do things previously thought impossible at speeds we haven’t seen in generations,” Carney said on election night. Now it will take time, time that we sadly don’t have. As Macklem pointed out in his media appearance on Wednesday, the national unemployment rate has risen to 7.1%. This advertisement has not loaded yet, but your article continues below.

“The labour market is soft. Employment gains in September followed two months of sizeable losses. Job losses have been concentrated in trade-sensitive sectors, and hiring has been weak across the economy,” he said. The major project office is a good idea in theory, but Carney is moving too slow, being too tepid to respond to the threats we are facing.

Even if the US Supreme Court strikes down Trump’s tariffs next week – an unlikely outcome, especially the 232 tariffs — we would still need to respond to his attempts to change the global trading order. Governor Macklem has been blunt, start changing or accept being poorer. To change course, we need to be going at full speed, but Carney has barely put the car in first gear.

We need him to live up to his words — think big, act bigger, move at speeds not seen in generations. The future of the country depends on this. RECOMMENDED VIDEOWe apologize, but this video has failed to load. Toronto Blue Jays Sunshine Girls Sunshine Girls Toronto & GTA Toronto Blue Jays Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic.

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