Canadians' real disposable income grew twice as fast as that of Americans' in the last four years – a trend that will continue in the post-recession economy, finds a new report from CIBC World Markets Inc.
Since 2005, per capita real disposable income in Canada has risen by $2,600, whereas in the U.S. it has risen by just over US$1,300. This is a complete reversal of the trend seen in the 1990s when Canadian income stagnated compared to surging U.S. earnings.
"So quick was the revival of Canadian income that in a short four year span, per capita real income in Canada was able to wipe out no less than 15 years of income underperformance vs. the U.S.," says Benjamin Tal, senior economist and author of the report. "In fact, when measured in common currency, real per capita disposable income in Canada relative to the U.S. is now back to the 1990s' level."
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