Canada’s economic outlook is weakening despite headline growth figures that mask deeper structural problems, according to the OECD Economic Survey of Canada 2025. The report paints a picture of an economy running out of steam, with sluggish productivity, mounting trade pressures and an entrenched housing crisis threatening to hold back living standards.

While overall GDP ticked higher in 2024, the OECD notes that growth per person remains stagnant and well below that of other advanced economies. The rebound was driven mostly by population increases rather than genuine economic strength. With weaker investment and fading export performance, the report suggests the country’s underlying economic capacity is deteriorating rather than improving.

The survey points to worrying signs in trade and investment. Escalating tariffs and tense relations with the United States are already weighing on exports and business confidence. Private investment continues to lag, and firms show limited appetite for innovation or expansion. The OECD warns that without a turnaround in productivity and competitiveness, Canada risks sliding further behind peer nations.

Housing remains one of the most severe drags on the economy. The report highlights surging prices, record household debt and growing financial stress among mortgage holders. Despite efforts to increase supply, affordability continues to worsen, pushing more households into precarious situations. The OECD says these pressures are eroding consumer spending and deepening social inequality.

Productivity—a long-standing weakness—shows little sign of improvement. Businesses invest less in machinery, technology and research than counterparts in similar economies. The OECD identifies a lack of competition, burdensome regulations and slow digital adoption as major obstacles. Without meaningful reform, the report warns that Canada’s productivity gap will continue to widen.

Canada’s growing public debt underscores those concerns. As of this year, the federal debt stands at more than $1.27 trillion, equal to roughly $30,500 for every Canadian. The rapid buildup since the pandemic years has raised questions about fiscal sustainability, particularly as interest costs consume a larger share of government spending. See Debt Clock.

Slower growth, heavier debt loads and rising spending pressures could limit the government’s ability to respond to future shocks. The OECD calls attention to fiscal risks, particularly if economic momentum continues to fade.

Overall, the survey offers a stark assessment: Canada’s recent growth has been shallow, built more on demographics than productivity or innovation. Unless structural weaknesses are addressed—especially in housing, trade and business investment—the country faces a period of prolonged stagnation and declining prosperity.

Source: OECD (2025), OECD Economic Surveys: Canada 2025, OECD Publishing, Paris, https://doi.org/10.1787/28f9e02c-en.