The Canadian flag waves from the top of the Peace Tower on Parliament Hill in Ottawa on Wednesday, October 30, 2024. (Photo: Sean Kilpatrick / The Canadian Press)
Canada must act fast to improve housing affordability and worker productivity, according to a new report from the Organization for Economic Co-operation and Development (OECD). The report raises concerns about Canada’s economic future, especially as global trade remains shaky and new U.S. tariffs begin to sting.
While the OECD acknowledged that Canada’s economy has held up well overall, it pointed out that growth per person has fallen behind—especially compared to the United States. The report warned that if conditions worsen, Canada may need to lean on government support and lower interest rates to keep the economy afloat. But such steps should only be taken if inflation caused by tariffs remains under control.
The OECD study didn't just focus on the economy’s immediate challenges. It also took a closer look at long-term structural issues that are holding Canada back. Among the biggest concerns are rising home costs and sluggish productivity levels. These factors, the report suggests, could weaken Canada’s economic standing if not addressed quickly.
To tackle these issues, the OECD recommended a range of practical policy changes. First, it urged federal and provincial governments to work together to reduce barriers between provinces. These internal trade obstacles often make it difficult for businesses and workers to move or operate freely across regions. Streamlining this system could give a significant boost to productivity.
Another major point of concern is the complicated and inconsistent way professional qualifications are recognized across provinces. According to the report, making it easier for skilled workers to have their credentials accepted nationwide would allow them to move where jobs are available—leading to better job matches and a more efficient workforce.
The OECD also emphasized the need to prepare for climate-related changes, suggesting that Canada must adapt its policies to be more climate-resilient. This means investing in infrastructure and planning that can withstand shifting weather patterns and environmental risks, all while still supporting economic growth.
Looking ahead, the report offers a less-than-rosy forecast. It expects Canada’s economic growth to slow down, from 1.5% in 2024 to 1% in 2025 and 1.1% in 2026. The decline signals that unless key issues—especially productivity and housing—are dealt with, Canada may struggle to maintain its current quality of life and economic stability.
In short, the OECD has sent a clear message: if Canada wants to remain competitive and prosperous, it must make real progress on its most pressing economic challenges. The time for surface-level fixes is over—now it’s about smart, coordinated action.
