The Organization for Economic Co-operation and Development (OECD) recently projected the Canadian economy’s unexpected resilience in the face of enduring difficulties. What has been very weak has been Canada’s per capita growth in GDP. That’s particularly true when you put it side-by-side with the United States. This stark contrast highlights the importance of strategic, structural policy changes to maximize productivity, housing access, and climate resilience so desperately needed.
Even with the seemingly strong overall economy, Canada’s per capita GDP growth has suffered in comparison to their southern neighbor. This has caused concern among economists about the sustainability of this economic advancement across Canada. The OECD report is based on predictions that Canada will lead the G7 in GDP growth at 1.5 percent in 2024. That’s before the realization of what’s coming – an expected drop to one percent in 2025, recovering only slightly to 1.1 percent in 2026.
To remedy these economic deficiencies, the OECD is calling on Canada to adopt a set of structural policy reforms focused on raising productivity. Increasing productivity is key, as it’s one of the main drivers of growing wages and stronger economic growth. The OECD warns that without these improvements, Canada’s growth path could be permanently marked by stagnation.
The press release and accompanying report underscore the urgency to address the housing affordability crisis. This ongoing challenge continues to be a major hurdle across most Canadian municipalities. Soaring housing inflation has added new challenges for Canadians looking to find stable, affordable places to live. The OECD suggests that reforms in this area could alleviate some of the financial pressures faced by households and support overall economic stability.
The OECD has urged reforms to enhance climate adaptation strategies. As Canada continues to witness the increasing realities of climate change, policy solutions which improve resilience to an ever-changing environment are absolutely necessary. These adaptations protect vulnerable communities but are crucial to long-term economic vitality and sustainability.
