Canada must take urgent steps to improve productivity and housing affordability to secure long-term, sustainable growth, according to the OECD Economic Survey of Canada 2025 released Monday.
While the economy showed signs of recovery in 2024, the OECD projects GDP growth will decline from 1.5% in 2024 to 1.0% in 2025, rising only slightly to 1.1% in 2026. Trade tensions with the United States and tariff-related uncertainty continue to cloud the outlook.
“Canada’s policy framework for macroeconomic stability remains strong, with robust public finances and a well-capitalised banking sector,” said OECD Chief Economist Álvaro Pereira during the survey’s presentation in Ottawa.
“But to ensure inclusive, long-term growth, Canada must raise productivity, address housing affordability, and strengthen climate resilience.”
Pereira, a dual citizen of Portugal and Canada, holds a PhD in Economics from Simon Fraser University, where he was a professor of Economic Development and Economic Policy. He also lectured at the University of British Columbia.
The OECD highlights Canada’s persistent productivity gap relative to other advanced economies. To address it, the report recommends reducing internal trade barriers, improving labour mobility, attracting more foreign investment, and enhancing support for business R&D.
It also calls for greater labour force participation among women, who remain under-represented in STEM fields and leadership roles. Expanding access to childcare, strengthening parental leave policies, and enforcing pay equity are among the proposed solutions.
Housing affordability remains a critical issue, with rents and home prices continuing to climb. The OECD urges reforms to zoning laws and faster permitting to boost housing supply.
On climate adaptation, the report stresses the need to move from disaster response to proactive risk reduction. Investments in climate-resilient infrastructure and tighter restrictions on development in flood- and fire-prone areas are key priorities.
Should the economy weaken further, the OECD says Canada has room to ease fiscal and monetary policy—so long as inflation remains contained.
The survey concludes that while Canada’s macroeconomic fundamentals are strong, bold structural reforms are needed to ensure future growth is both inclusive and sustainable.
