The Alabama Comparison

A comparison that began in an economics paper has become a national talking point. University of Calgary economist Trevor Tombe's ranking of GDP per capita across all 10 Canadian provinces and 50 US states has been cited in Globe and Mail editorials, circulated virally on social media, and invoked in parliamentary debate. The core claim: Ontario, Canada's economic engine, now ranks below Alabama. [1]

The claim is accurate. It is also incomplete — in ways that both its champions and its dismissers prefer not to acknowledge.

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1. The Ranking

Tombe's methodology combines StatCan provincial GDP data with US Bureau of Economic Analysis state GDP data, adjusts for purchasing power parity (which accounts for the exchange rate and cost-of-living differences between the two countries), and divides by population. The result is a common-currency, cost-adjusted measure of economic output per person across all 60 jurisdictions. [1]

Using 2024 data, the ranking places Ontario 48th, with a PPP-adjusted GDP per capita of approximately US$65,000. Alabama sits slightly below Ontario at roughly US$63,000 — though the two have traded positions in recent years and are functionally indistinguishable. Quebec ranks 55th at US$60,100, below Arkansas and Oklahoma. Only Prince Edward Island, New Brunswick, Nova Scotia, Manitoba, and Mississippi rank lower. [2]

Source: Trevor Tombe / The Hub, using StatCan and US BEA data, PPP-adjusted. Rankings approximate due to year-to-year volatility at margins.

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2. What "Below Alabama" Omits

The viral framing treats Alabama as a punchline — a stand-in for poverty and dysfunction. This is inaccurate, and the inaccuracy matters for the comparison.

Alabama's economy has been transformed over the past three decades by aggressive industrial recruitment. Since Mercedes-Benz opened its first US plant in Vance, Alabama in 1997, Honda, Hyundai, Toyota, and Mazda have all followed. In 2024, Alabama produced 1.2 million vehicles — nearly as many as Ontario's 1.3 million. Huntsville, anchored by NASA's Marshall Space Flight Center, Redstone Arsenal, Blue Origin, and Northrop Grumman, has become one of the fastest-growing metro economies in the United States. Alabama's unemployment rate sits at 2.7%, compared to Canada's 6.5%. [5]

The "we've fallen to Alabama" framing assumes Alabama is a fixed point of backwardness. In reality, Alabama moved. Canada didn't.

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3. What "It's Meaningless" Omits

The rebuttal to the Alabama comparison typically takes one of two forms: GDP per capita doesn't capture social programs, and PPP adjustments are imprecise. Both claims have merit. Neither invalidates the comparison.

The healthcare argument. Canada's universal public healthcare system provides a real benefit not reflected in GDP per capita. CIHI data shows total Canadian health spending at approximately $399 billion in 2025 — roughly $9,900 per person. The public sector covers about 71% of that, meaning the average Canadian receives approximately $7,000 in publicly funded healthcare. [7]

This is a genuine advantage. But it does not close the gap. Ontario's PPP-adjusted GDP per capita trails the US median state by roughly $15,000–$20,000. Even valuing public healthcare at the full $7,000 per capita and assuming zero healthcare benefit for the Alabama comparison (which is wrong — Alabama has Medicaid, employer plans, and the ACA marketplace), the gap narrows but doesn't close. And healthcare is the single largest social program. Once you've used that card, there isn't another one of comparable size.

The exchange rate argument. In nominal USD terms, the gap between Ontario and Alabama looks even wider, because the Canadian dollar has depreciated roughly 30% against the greenback since 2012. The "67% of US GDP per capita" figure that circulates on social media uses nominal USD, which maximizes the apparent gap. Tombe's PPP-adjusted methodology corrects for this. But here is what the dismissers don't engage with: even after PPP adjustment, Ontario still ranks 48th. The exchange rate explains why the nominal figure looks worse than the real one. It does not explain why Ontario's productivity stopped growing. [1]

The housing gap. If the "it's meaningless" crowd wants to argue that quality of life isn't captured in GDP per capita, housing works against them. The typical Ontario home costs roughly C$778,000 — approximately 8 times median household income. In Alabama, the typical home costs roughly US$232,000 — approximately 3.8 times median household income. The National Bank of Canada's Q4 2025 Housing Affordability Monitor puts the national mortgage-payment-to-income ratio at 51.6%. The equivalent US figure is closer to 34%. [8] [9]

A Canadian household that is nominally "richer" in social programs but spending half its income on shelter is not experiencing the GDP gap as an abstraction.

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4. The Trend Line

The most important feature of the comparison is not the 2024 snapshot. It is the direction.

In 1981, Canada's GDP per capita was 94% of the US level — near parity. By 2000, it had drifted to roughly 85%. By 2014, it was approximately 78%. Today, depending on the measure, it ranges from 67% (nominal) to 78% (PPP-adjusted). Every measure shows the same direction. No measure shows a reversal. [3] [4]

The acceleration since 2014 is particularly notable. The gap roughly doubled in a decade. Over the same period, Canadian business investment per worker fell, R&D spending as a share of GDP remained at 1.7–1.8% (less than half the US rate), and labour productivity in the business sector declined outright. [6]

The debate about whether the Alabama comparison is "fair" is a debate about a number. The debate that matters is about a slope.