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Canada’s economy has outpaced that of every other G7 country over the past year, but there’s a big, million-people-sized catch.

That’s roughly how much Canada’s population grew over the past 12 months – almost entirely from immigration – for a 2.7-per-cent increase, according to the latest estimate from Statistics Canada. And as a mounting number of economists have pointed out, the massive influx of people is juicing the economic numbers.

Once the surge in population is taken into account, Canada’s real gross domestic product per capita, a measure of prosperity for the average person, is still where it was at the end of 2017.

In a recent note, Bank of Montreal chief economist Doug Porter highlighted the sluggish pace of growth at a time when the population is expanding so much faster than in the United States. In the seven years since the Trudeau government’s Advisory Council on Economic Growth proposed measures to boost growth through infrastructure spending, more foreign investment and higher immigration levels, per-capita growth in Canada has underperformed that of the U.S. by close to 1.2 percentage points per year.

The Canada of the past offers its own contrast to the current prosperity rut. The last time Canada saw its population grow this fast was the decade after 1951, when annual population growth ranged from 2 to 3.5 per cent amid a baby boom and postwar immigration.

Yet thanks to rising productivity, Canada’s overall economic output grew even faster – despite a whopping four recessions during that period – with the result that real per capita GDP raced ahead.

The past also holds a warning for what could come next. In the latter half of the 1950s, as population growth accelerated even faster, per-capita GDP did begin to stall. Yet that was with an economy growing roughly three times faster than it is now.

Canada’s population growth will likely slow from its current frantic pace as immigration officials work through the pandemic backlog of applications, but not by all that much. Barring a vast improvement in productivity, Canada’s per-capita GDP – and our standard of living – appear headed for an outright decline.

Decoder is a weekly feature that unpacks an important economic chart.

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