GDP per capita is the wrong metric.

A Sep 12, 2024, CBC News article, "Canada is getting poorer when compared to its wealthy peers, data shows," claims that, "Gross domestic product, or GDP, is the total value of goods produced and services provided in a country in a given year."

This is not correct. GDP counts the total number of dollars that change hands (are spent) in an economy in a given period.

Not all dollars that change hands compensate creating value. In fact, dollars spent fall into one of two categories: compensation for creating and adding material value ("wealth") to an economy, and unearned income ("rents") that extract wealth from an economy and concentrate it in the hands extracting it.

Wealth is also referred to as "capital" and is created when human activity combines raw materials to create a product – a house, for example, or a soufflé – whose material value is greater than that of the sum of its parts. Rents, also referred to as "fictitious capital" when they are added to rather than subtracted from GDP, do not create wealth but transfer it from one set of hands to another.

For example, building a house creates a capital good, a house. Building a house, maintaining it, and allowing a tenant, for a fee, to reside in it provides a service. All good so far.

Suppose, however, that the availability of houses to let decreases and the holder of that house is therefore able to demand a higher fee to allow a tenant to reside in it. That increase is unearned income, a rent, and extracting it, rather than creating or adding material value ("wealth") to the economy, transfers wealth to and concentrates it in the hands of that holder.

Adding rents ("fictitious capital") to GDP paints an overly optimistic picture of the productivity of an economy. Dividing by population a GDP that includes fictitious capital creation and concluding that "more people taking slices out of an economic pie" explains the feeling of economic malaise sweeping an economy whose material wealth is being concentrated increasingly in hands that hold and trade financial assets is barking up the wrong tree.

The article mentions "population growth," "more people," "population boom," "immigration policy," and "immigrant" numerous times but mentions rents, fictitious capital, wealth extraction, and concentrating wealth not once.

Let us examine some facts:

BC's real GDP in 2023 was $305 billion, of which $73.3 billion (24.11%) was paid to the FIRE (Finance, Insurance, and Real estate and rental and leasing) sectors. ("Real GDP" measures GDP in 2017 inflation-adjusted dollars.)

Canada's real GDP in Feb., 2024 was $2,219,301 million, of which $414,293 million (20.47%) was paid to its FIRE sectors.

China's GDP in 2022, by comparison, was about $17.96 trillion USD, of which 33.3% was produced by its industrial sector and 14% was paid to its FIRE sectors.

According to StatCan, the operating profit margin that "Lessors of residential buildings and dwellings (except social housing projects)" enjoy has increased steadily from 41.3% in 2012 to 47.1% in 2021 over the timespan available for this particular data point.

The operating profit margin for "Food services and drinking places" (restaurants) by comparison, averaged 4.4% during the same period, more than ten times less. The defining characteristic of a rent is profit that greatly exceeds costs.

According to the Conference Board of Canada, "Canadian financial institutions and pension funds held $7.8 trillion in assets at the end of 2018."

According to the Toronto Star on July 6, 2023, "The wealthiest 20% of households controlled nearly 68% of the total net worth in Canada in the first quarter of 2023, while the least wealthy 40% accounted for 2.7%."

According to a Jan. 15, 2023, Oxfam Canada report ("Richest 1% Bag Nearly Twice As Much Wealth As The Rest Of The World Put Together Over The Past Two Years"): "For every $100 of wealth created in the last 10 years [in Canada], $34 has gone to the richest 1 per cent and only $5 to the bottom 50 per cent. This means that the richest 1 per cent have gained nearly seven times more wealth than the bottom 50 per cent in the last 10 years."

In August, 2022, mortgage debt in Canada reached $2.06 trillion. (Mortgage debt in October, 2000 was $418 billion.) Non-mortgage household debt in August, 2022 was $724.2 billion. Canada's nominal GDP in 2022 was $2.14 trillion. Canadians' total household debt in 2022 was thus almost 110% of Canada's GDP.

The problem with Canada's economy is not "immigrants."

It is that Canada's economy has been so thoroughly financialized since the late 1970s that "GDP per capita" is as meaningless a number as "average income."

Finance, Insurance, and Real Estate – the fictitious-capital producing sectors of Canada's economy – vastly overwhelm real wealth production in Canada and concentrate a relentlessly increasing share of that wealth in ever more bloated hoards controlled by fewer and fewer hands.

The solution is to definancialize housing by building publicly financed purpose-built affordable workforce housing and deprivatize banking to direct capital away from speculation in financial assets toward investment in R&D, plant and equipment, and employing labour to develop new technologies, produce advanced materials, and manufacture products to participate constructively in domestic and global markets and supply chains.