Article by Adam Creighton, courtesy of The Australian
02.01.2026
Real GDP per capita growth in Canada over the decade to 2024 has been a miserable 0.2 per cent, compared with 21 per cent in the US and 8 per cent in Australia, according to the IMF’s 2024 World Economic Outlook.
Canadians, once enjoying living standards roughly equal to Americans in the 1980s, now have a GDP per capita around the level of Alabama, one of the poorest US states.
Resource-rich Canada has pursued the same destructive policy mix as Australia – mass immigration combined with a naive obsession with phasing out fossil fuels to slow global warming. But our northern Commonwealth cousin at least offers some hope that Australia might yet come to its senses.
Under the prime ministership of Mark Carney, erstwhile pin-up of progressive internationalists, Canada has enacted shock policy U-turns on population and energy that Australia could, should and probably will belatedly emulate.
In the third quarter of 2025, something remarkable, and near unthinkable in Australia, happened in Canada – its population of around 41.5 million shrank for the first time since the 1940s. While our population bulged a further 100,000 or so, Canada’s fell by more than 76,000, or 0.2 per cent.
Australia and Canada for years have vied for the most rapid immigration-powered population growth in the developed world, underpinned by torrents of international students and temporary workers mainly from developing, non-English-speaking countries, understandably seeking a better life.
“We are taking back control over the immigration system and putting Canada on a trajectory to bring immigration back to sustainable levels,” the Ottawa government said last month as it promised to cut the temporary population share below 5 per cent by the end of 2027, down from 7.3 per cent currently.
In Australia, meanwhile, more than 2.5 million residents, or more than 10 per cent of the population, were on temporary visas as of mid-2025. Carney, elected in March, slashed successful asylum claims by around a third, temporary foreign worker entries by more than 70 per cent, and international student permits by around half from to 155,000 in 2026.
Former prime minister Justin Trudeau’s plan to grant an eye-popping 500,000 permanent resident visas in each of 2025 and 2026, well over double Australia’s official intake of 180,000, was reduced to 380,000.
It appears to have dawned on Canada that mass immigration, quite aside from the deleterious impact on social cohesion, isn’t a recipe for economic strength. As is increasingly obvious in Australia, Canadian authorities have realised immigrants are more likely to be driving Ubers than working in a field related to their education or training. The lucrative international student trade had been enriching a sliver of bureaucrats in the higher education sector but not the broader economy.
The unemployment rate for immigrants has been hovering around 11 per cent, double the rate for Canadian-born residents.
But Carney’s about-face on energy policy has been even starker. The one-time founder of the Glasgow Financial Alliance for Net Zero and former United Nations special envoy on climate change finance has cut the nation’s federal consumer carbon tax to zero dollars, which had added roughly 18 cents per litre to fuel prices, according to the Bank of Canada.
“He spent 10 years basically as the Al Gore of the finance world. And now that he’s Prime Minister of an oil-exporting country, he doesn’t want to talk about that anymore,” Ross McKitrick, a professor of economics at the University Guelph in Ontario, told me last week in a forthcoming interview to be published by the Institute of Public Affairs.
That’s not all. Carney has dumped his predecessor’s demand that Canadian automakers ensure 20 per cent of new car sales were electric by next year, which was proving increasingly unlikely as similar mandates have proved in the US. He’s also reached an agreement with Alberta’s conservative government to exempt the nation’s most energy-rich province from a slew of so-called clean-energy regulations.
“He’s basically pushing ahead with fossil fuel development; I think it’s a good indicator of just how unrealistic so much of that rhetoric is,” McKitrick says.
“Certainly, here in Canada and the US … the need to build out reliable power systems for AI and other industrial applications is a reality check for people.”
Carney has begun channelling Donald Trump’s promotion of fossil fuels, backing a controversial oil pipeline to the Pacific designed to carry around one million barrels a day from Alberta’s oil patch to export terminals serving Asia’s ravenous energy markets. It’s not just an infrastructure project but a statement that Canada intends to leverage its remarkable resource endowments.
These weren’t minor backflips. Left-wing cabinet minister Steven Guilbeault even resigned in disgust. Caroline Brouillette, executive director of Climate Action Network Canada, fumed in response last month that Carney had “lost large swaths of progressive voters and any shred of environmental credibility”.
Carney could do a lot more to salvage Canada’s waning competitiveness but he’s done vastly more than our own leaders, who remain wedded to failed mass immigration to prop up economic growth at the same time as they persist with economically naive energy policies that can only end in failure.
Adam Creighton is chief economist at the Institute of Public Affairs.
If self-imposed economic stagnation was a global competition, Australia’s only serious competitor among rich nations would be Canada. While Australia’s decline has been sudden – GDP per capita has contracted in 10 of the past 13 quarters – Canada’s slump has been chronic, deep and more embarrassing, set against the prosperity of its southern neighbour, the US.