Ottawa, Canada – A recent social media post by Samuel Hammond, Senior Economist at the Foundation for American Innovation, has sparked discussion regarding Canada's economic trajectory over the past decade. Hammond's tweet, shared on August 8, 2025, highlights a significant shift from a period when Canada's median income reportedly surpassed that of the United States, to a subsequent era marked by economic stagnation and altered political priorities.
"10 years ago stories were being written about how Canada's median income surpassed America's. Then fracking took off, the oil sands collapsed, and housing prices soared, ushering in a decade of stagnation and warped political priorities. That wasn't that long ago. We can return!" Hammond stated in his tweet.
Historical data indicates that around 2010, Canada's real median household income did indeed show a temporary advantage over the U.S., growing by 1.2% annually compared to a 0.1% decline in America. However, more recent figures from 2021 show Canada's median income at C$68,400, while the U.S. recorded $70,784 USD, suggesting a reversal of this trend.
A key factor in this economic shift was the evolution of the energy sector. While Canada's oil sands remained a significant part of its economy, the rise of hydraulic fracturing, or "fracking," in the United States fundamentally altered the North American energy landscape. The lower cost and higher economic viability of U.S. shale oil production, coupled with declining global oil prices, led to reduced investment and scaled-back operations in Canada's more expensive oil sands projects.
Simultaneously, Canada has experienced a dramatic surge in housing prices. From 2000 to 2016, the average house price more than doubled, increasing by 115%, while after-tax incomes rose by only 35%. This widening gap has led to a severe affordability crisis, particularly in major urban centers, driven by factors such as low interest rates, strong population growth, and limited housing supply.
The cumulative effect of these developments has contributed to a broader economic stagnation in Canada. Reports from institutions like the Royal Bank of Canada and the International Monetary Fund point to slow growth, declining productivity, and persistent inflation. This has raised concerns about the country's ability to maintain its high standard of living and has widened the economic gap with the United States.