Monday, February 23, 2026

When Arrogance Meets Reality

But ... surely Canada is better than the American South!

Right?


For eons, Canadians have viewed Alabama as a small state that, save for a few pockets, is dirt poor. All anybody seems to know about Alabama is that Montgomery and Birmingham were the centre of the civil rights movement. In 1963, when Martin Luther King Jr. wrote his “Letter from a Birmingham Jail,” he called Birmingham “probably the most thoroughly segregated city in the United States.”

So, it was a shock when Canadian economist Trevor Tombe and the International Monetary Fund ran the numbers in 2023 and 2024 and concluded that Canada had, in fact, become poorer than Alabama.

To measure this, they calculated gross domestic product (GDP) per capita. In simple terms, it’s the size of the Canadian economy in a given year divided by the population. The same was done for Alabama. After adjusting for foreign exchange and some cost differences in both countries, the average for Canada’s 10 provinces was estimated at at US$55,000 in 2022, the same as Alabama. Shortly after, the IMF found Canada had actually fallen behind the southern state. (Canada has since edged ever-so-slightly higher than Alabama; the numbers are volatile from year to year.)

The timing was terrible for the Canadian psyche. Home prices were on an astronomical trajectory, inflation made everyday items such as groceries far more expensive and there was deep resentment toward Ottawa. Canadians could probably stomach having their living standards slip relative to the broader U.S., the epicentre of the world’s tech revolution. But Alabama?

For an ego check, The Globe and Mail travelled to the Deep South to understand how this happened. Immediately, it was obvious Alabama is misunderstood. In Huntsville, there are as many Subaru Outbacks as there are pickup trucks, and the geography in Alabama’s two largest metropolitan areas – Birmingham and Huntsville – looks nothing like the historical imagery. …

Alabama is also home to five million people – the same population as Alberta – and its economy is booming. The state’s unemployment rate is now just 2.7 per cent, versus 6.5 per cent in Canada, and its major employers include Airbus SE and giant defence contractor Northrop Grumman Corp. The state has also morphed into an auto manufacturing powerhouse with plants from Mercedes-Benz AG, Toyota Motor Corp., Hyundai Motor Co. and more. In 2024, Alabama made nearly as many vehicles as Ontario. …

But being on the ground in Alabama, it was obvious that Canadians need a wake-up call. They tend to view the economy through a historical lens – this is a G7 country that has long punched above its weight. Yet capital is global now and competition for it is fierce. If Canada isn’t careful, places such as the Deep South will continue to steal jobs. The Eli Lilly plant awarded in December could have just as easily gone to Montreal, a pharmaceutical hub.

In other words, it might be time to eat some humble pie. “People have a lot to learn from Alabama,” Mr. Hughes says.

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This is the result of ten years of economic, industrial, political and social stagnation.

Not even one's snobbery can counter that.






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