Catching Up and Falling Behind: The Performance of Provincial GDP Per Capita from 1990 to 2003

Abstract

This paper compares GDP per capita across Canadian provinces over the period from 1990 to 2003. It starts by examining relative GDP per capita measured in current dollars across provinces and over time. The second section breaks down growth in nominal dollar GDP into a price and a volume component asking whether growth over the period came from an increased volume of real output or increases in the prices received for the products being produced. Finally, the third section asks whether increases in the volume component (real GDP per capita) are related to changes in productivity or changes in labour market conditions.Among the provinces, the most striking performer was Alberta. Its GDP per capita increased rapidly over the period, leaving the other nine provinces well behind by 2003. Almost equally striking has been the increasingly similar levels of provincial per capita GDP when Alberta is excluded. The per capita GDP of most provinces moved closer to national levels over the period. This was especially true of Newfoundland and Labrador whose GDP per capita rose at a break-neck pace after 1997.