Matt Gurney: Giving up on Canada — an update

Two years after, are we seeing what I was told to watch for?

This man will soon buy a 90,000 square foot house for $240,000.

By: Matt Gurney

If people were giving up on Canada — specifically, people with means — how would we know?

That’s not rhetorical, and it’s a more complicated question than you might think. Almost two years ago, Jen Gerson and I both began hearing many interesting anecdotes about wealthier Canadians, those with options, quietly leaving the country. There were fascinating hints of data that backed up our hunches, too. Jen wrote a column about it; so did I. But we both had the same problem. It’s a rule in our line of work that the plural of anecdote is not data. That is to say, just because you hear the same thing a bunch of times doesn’t mean it’s true. But two years ago, when I kept hearing the same thing over and over, I went looking for the data.

And I couldn’t find it. It doesn’t exist.

Let me back things up a bit. People move in and out of Canada all the time, and for lots of reasons. For basically my entire lifetime, way more people wanted in than out, and of course they did. For much of the world, Canada is a beacon of opportunity and safety. And God bless anyone who comes here legally and builds a better life for themselves and their families. You’ll never hear me say a word against an immigrant — they’re incredibly brave. And as they arrived, and arrived much faster under the former prime minister, our national population surged.

The flip side of this strong and sustained desire among many to move here, though, is that as much as some Canadians hate to admit it (and gosh, do they really hate admitting it), for many of us — not all, not most, but many — we can equal or exceed the quality of life offered here by going elsewhere. Canada is objectively good, but for some, it’s not the best.

---

Hello! Sorry to interrupt Matt’s column. We’ll get you back to it in a minute.
But. We are running our annual fundraiser, and we could really use
your support. We exceeded our first-day target, and that’s incredible, but we
still have a long way to go, and we need your help to get us there.
Our goal today? Do even better on the second day than the first.

It’s a tall order. We’ll need your help.

The Line is working on a big change — something much different than
we’ve ever done before. And we’re going to need to refill the war chest to
make it work — the tax man just took his share (and then some!). Remember
that we accept no government bailouts or subsidies, and never will. We are
dependent on the support of our readers and podcast audience to survive
and grow. So help us with that. Click the little blue button below and
chip in whatever you can so that we can hold the line … and grow.

And now, back to Matt’s column …

---

I’m not telling you to leave the country! Obviously, everyone’s own values matrix will differ. But as much as Canada has to offer, in some categories, we’re simply outclassed. If you have money, you can get better health care. You can pay lower taxes. You can find a more competitive business environment. You can buy shockingly better houses and properties. (Once, out of morbid curiosity, I spent an hour figuring out what I could get for a house in some of America’s largest cities if I sold my house in Toronto. Even after adjusting for the currency exchange, the difference was honestly hard to believe.) And let’s not downplay this: our weather is garbage for a third to half the year. The thrill of a long, dark and cold winter wore off for me years ago.

What if we were in a situation, Jen and I both wondered two years ago, where a lot of people were still choosing to come to Canada to improve their lot in life, so our total population was going up, but many Canadians, specifically those with money and options, were deciding to get out to improve theirs? Or, what if, I wondered in a bit of added nuance, wealthier and more mobile Canadians were starting to get their money out, even if they chose to stay most of the year? You know, to be near the kids and grandkids.

Here’s how I expressed what I thought was happening two years ago: “You don’t have to stop being Canadian. You don’t have to uproot your family and leave your friends and stop going to your favourite pub or coffee shop. But you establish an option. A legal and banking presence in another jurisdiction. Maybe a place to live that you list on AirBNB when you’re not using it. You set up a corporate structure that causes some of your money to migrate out of Canada, again entirely legally, and exist somewhere else. Maybe you spend a few months out of the country every winter, maybe you don’t. But you could.”

I think that’s happening. But I can’t prove it’s happening. The scenario above isn’t really captured in a stat. You can do that and not trigger any kind of declaration or tax consequence. People can still live here, at least most of the year. They still pay taxes here. They can purchase properties abroad, or rent them. And shift either their entrepreneurial efforts or portions of their cash flow to other countries. The U.S. is a big one, but not the only one. I know many people doing this in Europe and Latin America. And none of this is captured in any particular dataset.

Not that I didn’t try to find it! Two years ago, I called a few smart people, including a StatCan source, to ask about this. I explained what I thought was happening, and asked how I could find out if it actually was or if I was overreacting to a few coincidences. They confirmed what I more or less suspected: it wasn’t possible to prove or disprove my hunch. There just isn’t any metric that neatly captures the scenario I think is happening.

When someone leaves and gives up their residency status, that’s captured in government data. When someone just sort of begins shifting some of their time and money to another jurisdiction, that’s harder. What separates a partial departure from Canada from a long vacation? What’s the empirical difference between quietly moving your money to another jurisdiction, just in case you end up moving there, and simply investing in an asset abroad?

My friends and sources did actually agree on one thing, though. They generally concurred that I was onto something — that wealthy Canadians, those with assets that could move, were behaving differently than normal; specifically, they were setting up Plan Bs outside of the country. They also said that if there was to be something that captured this, and it would only be a rough proxy, it would be entrepreneurial activity. If we started seeing strange drops in things like business start ups within Canada, that could be a signal that Canadians with the money and ambition to create new commercial ventures were starting to behave differently. Specifically, that they were choosing to not do that in Canada. To do it abroad, if they did it at all.

Well. Ahem.

You might have seen this report from the Canadian Federation of Independent Business. They found that business “exits” (businesses that cease operations) have exceeded “entries” (new businesses) for six quarters. They called it an entrepreneurial drought. That’s interesting. But what was most interesting was the timing. The timeline of when the CFIB saw this tipping point in the trend aligned very, very closely with when Jen and I both began to get the feeling that something unusual was happening.

And the trend itself — rising exits, slowing entries — goes back years before that. We moved into the negative in 2024, but the trend baked in years before that, after COVID. The CFIB report captures that (see chart on page four) but also, perhaps more tellingly, also captures a much longer-term trend. That’s on the fifth page. With the exception of when the pandemic first hit, exits don’t surpass starts. That hasn’t happened in 40 years. And it’s been the case now for six quarters in a row.

More bluntly: we now have evidence of that the thing my stat nerds told me might be a signal emerging right at the time I began thinking there might be a signal. And this signal is, historically speaking, unusual.

It’s not a slam dunk. I admit that. I offer this entire column more as a hypothesis in need of testing than a firm conclusion. I still can’t say with confidence that this is happening, because I still don’t know how to prove it. And there are lots of other things that could explain a slowdown in entrepreneurial activity. An older population will open fewer shops. Consolidation of businesses as boomers try and sell and retire could be a major factor. Plus there’s just all the awful uncertainty that we’ve lived through in recent years, with a literal plague, geopolitical upheaval, trade wars, actual wars … a lot has been going on.

I’ll stipulate to all that. But I’m stubborn, and I still think my hunch two years ago was right. I wish I had a better way to prove it. The one thing I’ve got, though, is what I was told to watch for. And now it looks like it might be happening.

I’ll continue to watch this. And if anyone has a better suggestion of what stat or dataset would confirm or deny my hunch, lay it on me. In the meantime, I’ll worry about this. Because a country like Canada can’t survive if the people who would drive its prosperity collectively start to give up and make other arrangements. And I think they’re starting, and continuing, to do exactly that.

---

The Line is entirely reader and advertiser funded — no federal subsidy for us! If you value our work, have already subscribed, and still worry about what will happen when the conventional media finishes collapsing, please make a donation today. Please note: a donation is not a subscription, and will not grant access to paywalled content. It’s just a way of thanking us for what we do. If you’re looking to subscribe and get full access, it’s that other blue button!

---

The Line is Canada’s last, best hope for irreverent commentary. We reject bullshit. We love lively writing. Please consider supporting us by subscribing. Please follow us on social media! Facebook x 2: On The Line Podcast here, and The Line Podcast here. Instagram. Also: TikTok. BlueSky. LinkedIn. Matt’s Twitter. The Line’s Twitter.Jen’s Twitter. Contact us by email: lineeditor@protonmail.com