Canada outperforms the U.S. on many well-being measures—yet on the important economic indicators, we are falling far behind

Over the past year, Canada has faced growing criticism for its weak economic growth, especially when compared to the U.S. While Canada’s economy has struggled to keep pace with its fast-growing population, the U.S. economy has continued to soar (though tariffs will challenge that). The result? As of 2024, per capita GDP is estimated to be $19,400 higher in the U.S.—compared with a gap of $8,100 a decade ago.

But not everyone thinks this tells the whole story. Some argue “American-style” per capita GDP isn’t the best measure of a country’s standard of living, and that Canada outperforms the U.S. on other important measures of prosperity, such as health and working conditions.

So, is Canada actually doing just fine? Are we missing something by focusing too much on per capita GDP? To dig a little deeper, we can look to the OECD’s How’s Life? database. It tracks over 70 indicators of prosperity across three key areas: material conditions (income, jobs, housing), quality of life (health, safety, education), and community relationships (social connections, civic engagement).

Based on the latest data, Canada outperforms the U.S. on 28 of the 39 indicators where both countries report data. The other indicators were either not reported by one or both countries or their reporting dates didn’t align, making direct comparisons unreliable (for more on methodology, see the call-out box below). Better still, Canada didn’t just outperform the U.S. on most measures, it also improved over time in about as many (19 compared to 18).

But it’s not all good news. Based on these broader measures of prosperity, both Canada and the U.S. are showing signs of trouble in a few key areas.^{1This analysis relies on a subset of the prosperity indicators from the OECD’s How’s Life? database. Based on data availability, we analyzed 39 of the 71 indicators. To measure progress, we calculated the percentage change for each indicator over the past decade. That said, there are limitations. Some indicators are not reported consistently or annually (e.g., voter turnout), which means that not all have the same beginning and end points; and, oftentimes, the time period used is shorter than a decade. On top of that, there are a few cases where one country has more recent data available than the other. To ensure comparability, we allowed no more than a one-year difference between countries and made sure the time horizons were equivalent. It’s also worth noting that an increase (or decrease) in some indicators may be more problematic than others. For instance, a small increase in inequality may or may not be negative for prosperity depending on several other factors like whether other income groups saw an improvement in their standard of living, too; if individuals have equal opportunity; and so forth. While some indicators may be considered more important than others—and none are without their own shortcomings—the intent is to offer a more complete picture of prosperity and progress than GDP alone.}

One of those is health. In the U.S., substance-related deaths have jumped 56 percent, life expectancy has fallen, and fewer people are reporting good health. Though not as stark, measures of health have worsened in Canada, too, particularly among self-reports. The share of people who say they’re in poor health jumped 33 percent. Likewise, reports of physical pain have risen, as has the share of people who say they experience more negative than positive emotions each day—up from 10 percent to 17 percent.

Safety has also taken a hit. In the U.S., homicide rates are up 50 percent, road deaths have risen, and Americans are more likely to say they don’t feel safe walking alone at night. Canada fares much better here: it’s seen a decline in both homicides and fatal car accidents over the last decade. Still, Canadians are growing worried for their safety: the percentage of Canadians who don’t feel safe walking alone at night increased from 20 percent to 26 percent.

Though data is more limited, both countries have also seen a breakdown in social connections. More Americans and Canadians say they lack social support, possibly pointing to a deeper decline in overall life satisfaction.

But there’s a final area where Canada’s relative weakness is most apparent: income and work—measures which are most closely tied to per capita GDP.

On this front, both countries have made gains. Earnings are up; fewer people are putting in long hours; more young people are in school, training, or jobs; and long-term unemployment is down—exactly what you’d hope to see as countries grow richer (albeit a stronger labour market likely helped).

But Canada is clearly falling behind. While those at the bottom of the income distribution have struggled in the U.S., the average American has done well. Americans’ after-tax incomes have grown by 21 percent, on average, while their median net wealth (assets less debt) has grown by 45 percent. In Canada, gains in income and wealth have been just a fraction of that—11 percent and 15 percent, respectively.

What does this all mean? This quick exercise suggests that Canada does, in fact, outperform the U.S. on many broad measures of well-being outside of per capita GDP. That said, our poor economic performance is almost certainly contributing to our weak financial gains. What’s more is that certain aspects of health, safety, and a sense of community have deteriorated in Canada over the last decade. If the argument against per capita GDP is that it doesn’t matter as much as other, less financially-focused measures of prosperity, these declines are cause for genuine concern.

A version of this post was originally published by the Business Council of Alberta at businesscouncilab.com.