Some Canadians clutched their pearls so hard they nearly shattered last week, after The Globe and Mail published a deep dive into how, as its online headline read, “Out of Nowhere, Canada Became Poorer Than Alabama.”
There was some debate about whether analyses showing that our GDP per capita had recently fallen behind Alabama’s is enough to declare us poorer (GDP per capita is a nation’s economic output divided by the population, and is used to determine a country’s standard of living). But the real source of righteous indignation was far more revealing: the idea that Canada’s moral and social standing is so superior that such data can’t possibly reflect reality and, even if it does, it doesn’t matter.
The general reaction — which basically amounted to, “fine, we’re less competitive, but at least we’re more equal, more humane and more decent” — embodies Canada’s unique strain of economic hubris, which will cement our decline, if we don’t snap out of it. Indeed, Canadians didn’t just wake up one morning to find that “out of nowhere,” we had become poorer that the southern U.S. state. The reality is that we’ve been actively kneecapping ourselves for some time, all while maintaining a smug sense of superiority.
Our virtuous self-image rests on a specific promise: that Canada’s social contract protects people from some of the more brutal social outcomes historically seen in places like Alabama. While this promise has generally held for those lucky enough to enter the housing and job markets before 2010, younger generations are living the cruel reality that a country can claim world-class values and increasingly deliver third-world outcomes.
(Sidebar: this social contract.)
Meanwhile, Alabama, too self-aware and perhaps even embarrassed to be complacent, worked to close the gap. This is the real story of how we got here, not out of nowhere, but through indulging a moral self-image that doesn’t just confuse being “good” with being competitive, but actively sabotages any hope of progress by justifying complacency.
Even if you think that GDP per capita isn’t an accurate reflection of a country’s quality of life, Canada’s other indicators paint a disturbing picture of downward mobility. Our middle class and younger generations are being ruthlessly compressed, with floors continuously falling out from under them like dominoes. There’s no reason to believe we’ve seen the bottom yet.
A 28-year-old in Alabama can still hope to own a home and build a family, if they don’t have both already. The same can’t be said for many of their peers in Canada, who struggle to even rent a place of their own. The median home value in Alabama is around US$230,000 (C$315,000), with a median price-to-income ratio of 3.6. In Canada, the average price is around $650,000, and the price-to-income ratio is 8.4 .
While Alabama’s wealth gap is a fissure between rich and poor, ours is largely generational. For example, real incomes for Canadians in their prime working years have stagnated and declined over time, even as they’ve soared for seniors. For the first time, men past retirement age are actually earning more than men aged 25-34, according to research from economist Mike Moffatt. Similarly, our wealth gap sharply divides between asset-rich older homeowners and younger non-owners.
Some will point to Alabama’s minimum wage of US$7.25 and lower educational attainment as proof that we remain superior. However, in Canada, you can earn both a university degree and so-called middle-class salary and still find yourself locked out of housing and family formation, while living paycheque to paycheque. It’s not just possible, but common, to make a significantly higher salary in Canada than a peer in Alabama but have the same, or a markedly worse, quality of life.
The electorate will still put such people in power who make such knee-capping decisions that one must either conclude incompetence or deliberate malice:
Dear Canadians,
— Dei Civitas (@bill_c10) February 24, 2026
This is why you are poorer than Alabama.
Because your government is filled with vacuous ideologues who think that playing pretend games of "save the climate" is more important than real life men, women and children having a home, heating, food, work, and a… https://t.co/SfvLIEJKij
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