For years, holier-than-thou Canadians viewed Alabama as a gun-toting, pickup-truck-driving, yeehawing American state known for poor economic conditions and abysmal education. While Canada has “free” healthcare and keeps its elbows up — in hockey parlance, protect yourself or fight back — the Heart of Dixie is submerged in a sea of mullets and sleeveless cotton tank tops. But as Canadians dig out of the mess left behind by Old Man Winter and former Prime Minister Justin Trudeau, many Americans are singing Sweet Home Alabama.
Alabama > Canada?
Grab your binder, pencil, and pocket protector! We are heading back to Econ 101. Gross domestic product (GDP) is defined as the total value of all goods and services produced within a country. GDP per capita is the average amount of economic output produced per person. Purchasing power parity-adjusted GDP per capita accounts for differences in the cost of living across areas.
Based on a wide array of indicators, it is safe to say that the United States is thriving while Canada is barely surviving. According to the International Monetary Fund, the US GDP per capita, adjusted for 2024 purchasing power parity, is about $88,000. In Canada and Europe, it is about $64,000 and $57,000, respectively.
What is truly incredible about the US economy, however, is that the poorest American states, whether red or blue. are doing quite well compared to entire nations. So, when The Globe and Mail ignited a firestorm of controversy with an article titled “How Canada became poorer than Alabama,” it was not surprising.
The estimated PPP-adjusted GDP per capita for the Yellowhammer State is $69,000.
Critics were quick to contend that GDP per capita is not a reliable gauge, as it does not reflect income distribution or well-being. The CBC, the Canadian government-owned media property, attempted to utilize other metrics to suggest the newspaper's reporting was inaccurate, much to its dismay.
The US median household income was more than $67,000 last year, while Canada's was below $63,000 (far lower after taxes). Canada dropped to 18th place in the global 2025 World Happiness Report. The country ranked 16th in the UN Human Development Index – education, health, and living standards – after being in the top five throughout the 1990s. Canada is 17th in the world in the Global Innovation Index. Even in the widely watched Economist Democracy Index, the Great White North is No. 14.
Tale of Two Places
So, what happened north of the border? One man: Justin Trudeau. Trudeaumania left office with the worst economic growth record in modern Canadian history. This is astounding considering that his predecessor, Conservative Prime Minister Stephen Harper, endured the 2008-2009 Global Financial Crisis.
The former leader of the Liberal Party put forward some of the worst policies during his decade of destruction. Flooding the country with millions of newcomers in a few short years, running perpetual budget deficits, and introducing the carbon tax were among the mishaps of Mr. Sunny Ways. Capital investment slowed, leading to lower productivity. This is a country swimming in an ocean of natural resources, including the same critical minerals desired by the United States and China.
Additionally, another under-the-radar problem for Canada is public-sector bloat, with one-quarter of the working population employed by the government. In places like Prince Edward Island and Saskatchewan, that number is above 30%!
Contrast this to Alabama. In recent years, the state has enjoyed record-breaking business investment in urban centers and rural communities. This has been fueled by a competitive business and tax environment, which has led to steady job growth and one of the lowest unemployment rates in the nation.
Temperatures are also higher than those in the typical Canadian city. Alabama’s winter is 50 to 68 degrees warmer than most of Canada.
Wakeup Call
Many left-leaning Canadians will say either that GDP per capita means nothing or that it is President Donald Trump’s fault (TDS is big up north!). Canada’s decline has been years in the making, and the latest data point should be a wake-up call for the 40 million inhabitants. Will it?
A new national survey by Liaison Strategies found that the Liberals led by Prime Minister Mark Carney enjoy a 12-point advantage over Pierre Poilievre and the Conservatives. In other words, if an election were held today, the Grits would win by a comfortable margin.
