Economy--US vs Canada

AI Overview

The U.S. economy is larger, growing faster in recent years, and has a higher GDP per capita than Canada .

However, Canada's economy has more controlled inflation, a better fiscal deficit position, and lower university tuition and healthcare costs, though it faces challenges with recent slower per capita GDP growth and higher trade dependency on the U.S. This video discusses the current state of the U.S. and Canadian economies, highlighting their strengths and weaknesses: Related video thumbnail 56s BNN Bloomberg YouTube • Sep 17, 2025 Feature

United States Canada

Size (2023 GDP) ~$27.7 trillion ~$2.1 trillion

Economic Growth Faster growth, exceeding Canada's since 2022

Slower growth, flirting with recession at times

Inflation Higher and more persistent, putting pressure on the Federal Reserve Lower, within target range, giving the Bank of Canada more flexibility

Fiscal Health Significant budget deficit (around 6.4% of GDP) Smaller deficit (around 1.6% of GDP), making it more manageable

Trade Dependency Less reliant on trade as a % of GDP Highly reliant, with about 75% of merchandise exports going to the U.S.

Quality of Life Lower income taxes and better-doing households, but also higher healthcare and education costs Higher income taxes, but lower university tuition and healthcare expenses. Also has superior social benefits.

Per Capita GDP Higher Lower and has been growing at a slower pace than the U.S.

Key differences

Size and Growth: The U.S. economy is about ten times larger than Canada's and has grown faster in the last few years, widening the gap in GDP per capita.

Fiscal Health: Canada has a much more favorable fiscal position with a significantly smaller budget deficit as a percentage of GDP compared to the U.S.

Trade: Canada is heavily dependent on trade with the U.S., with about three-quarters of its merchandise exports going to its southern neighbor. Quality of Life: Despite a lower GDP per capita, Canada often scores higher on quality of life metrics, partly due to lower costs for healthcare and university education and superior social benefits. *