Immigration Canada: October 2025

Canada is at a crossroads. After years of warnings, the country now faces a dual crisis: an economy weighed down by weak productivity and a generation of young Canadians struggling to find their place in the workforce.

Unless addressed decisively, these challenges threaten not only today’s living standards but the long-term stability of our economy and society. The good news? Other countries have faced similar challenges—and have successfully turned them around. With the right mix of bold reforms, Canada can do the same.

The Challenge: Stagnation at Home, Vulnerability Abroad

1. Productivity in Decline

Canada has fallen from the 6th most productive economy in the OECD in 1970 to 18th today.
Canadian workers now produce only 71% of the output per hour of their U.S. counterparts.
Business investment per worker is about half the U.S. level, and Canada ranks 22nd in the OECD for R&D spending.

2. Youth Left Behind

Youth unemployment reached 14.6% in 2025, double that of core-age workers.
More than 850,000 young Canadians (15–29) are Not in Employment, Education, or Training (NEET).
Underemployment and involuntary part-time work are scarring young workers’ long-term earnings and career prospects.

3. Structural Weaknesses

Interprovincial trade barriers cost Canada up to 4% of GDP per capita.
Housing affordability has collapsed, with prices doubling in just 10 years.
Household debt stands at 171% of disposable income, the highest in the OECD.
Canada’s export basket remains overly dependent on the U.S. (75% of exports) and resource-based goods (55% of exports).

Why This Matters

These trends are not just numbers on a page. They represent:

Lost innovation and competitiveness.
A generation of young people at risk of permanent detachment from the workforce.
Families struggling under crushing housing and debt burdens.
A country vulnerable to U.S. trade shocks and global headwinds.

Inaction is not an option. The cost of doing nothing compounds every year.

Learning from International Best Practices

The good news is that Canada doesn’t need to reinvent the wheel. Around the world, other countries have tackled similar problems:

Germany & Switzerland: Dual apprenticeship systems that integrate classroom and workplace learning.
Singapore: The SkillsFuture program, offering every citizen learning credits to continually upskill.
Australia: Automatic Mutual Recognition (AMR) of professional licenses across states, reducing barriers to worker mobility.
New Zealand (Auckland): Up-zoning reforms to rapidly increase housing supply.
London, UK: Congestion pricing to cut traffic, improve productivity, and fund transit.
Germany (2023 Skilled Immigration Act): Fast-tracked credential recognition to integrate foreign-trained professionals within 90 days.

A Four-Pillar Strategy for Canada

To restore growth and opportunity, Canada needs a cohesive national strategy built around four pillars:

Pillar 1: Unleash the Domestic Economy

Eliminate interprovincial trade barriers through mutual recognition.
Streamline project approvals and cut red tape.
Reform the tax system: shift toward consumption taxes (HST) while reducing income tax burdens.

Pillar 2: Build a High-Value, Innovation-Driven Economy

Boost R&D spending with targeted direct subsidies in advanced sectors.
Incentivize AI and technology adoption for small and mid-sized firms.
Move exports up the value chain—support domestic manufacturing of refined and advanced products.
Modernize ports and logistics to diversify trade beyond the U.S.

Pillar 3: Activate the Workforce, Especially Youth

Expand apprenticeships, internships, and co-ops linked to future skills.
Recognize foreign-trained credentials faster to reduce underemployment of immigrants.
Invest in youth entrepreneurship with training and access to capital.
Update labour standards: eliminate unpaid internships, regulate placement agencies.

Pillar 4: Ensure Fiscal Prudence and Stability

Conduct systematic spending reviews for efficiency.
Reduce deficits over the medium term to stabilize debt-to-GDP.
Implement safeguards on household debt, such as stricter debt-to-income ratios.

What Success Looks Like by 2030

If Canada takes bold action now, the targets are clear and achievable:

Productivity: Close 25% of the gap with the U.S.
Trade: Reduce U.S. export share to 65%, while improving port efficiency rankings.
Youth Employment: Reduce NEETs by 250,000; cut unemployment gap by 3 percentage points.
Housing: Increase completions by 25% and stabilize rent growth to at or below CPI.
Fiscal Health: Put debt-to-GDP on a declining track.

Conclusion: A Call to Action

Canada has the talent, resources, and global position to succeed. But political inaction and short-termism have left us vulnerable.

This is a moment for a Team Canada approach:

Federal, provincial, and territorial governments working together.
Businesses investing in innovation and people.
Educational institutions aligning skills with the jobs of tomorrow.
Youth and newcomers empowered as the drivers of Canada’s renewal.

If we act boldly and decisively, we can build a dynamic, innovative, and inclusive economy that secures prosperity for all generations.

For decades, Canada has cultivated an image as the stable, prosperous "European cousin of the USA"—a kind of Nordic country Made in América. It's a reputation for quiet competence and reliable growth. But that image is beginning to crack under the weight of a severe and deepening economic crisis. The reality is that Canada is poorer today than it was six years ago and is currently navigating one of its worst economic crises in a century.

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1. The World's Safest Economy Has Lost Its Mojo

Historically, Canada has been the "anti-crisis" country. Its banking system was a global model of stability; between 1934 and 2009, only one Canadian bank failed. During the 2008 financial crisis, while half the world was staggering, not a single Canadian bank went under.

This legacy of stability makes the current situation all the more shocking. The country is now facing one of the "five worst years since the Great Depression." After adjusting for inflation and a historic boom in immigration, Canada's economy is now smaller than it was in 2019. The reliable engine of prosperity has stalled.

2. Our Greatest Strengths Are Secretly Holding Us Back

Counter-intuitively, two of Canada's greatest economic advantages—its wealth of natural resources and its privileged access to the U.S. market—have become structural weaknesses that constrain productivity growth.

This combination has encouraged Canadian firms to specialize in low-complexity, resource-based products like minerals and agricultural goods, which account for over 55% of the country's total exports. This focus has come at the expense of developing more innovative, high-growth sectors. The result is a startling lack of economic complexity, with Canada ranking 48th globally, far behind industrial leaders like Japan and Germany.

Furthermore, an extreme dependence on the U.S. market, which receives approximately 75% of all Canadian exports, has dampened the incentive to invest in crucial international trade infrastructure, such as modern maritime ports, limiting the country's ability to diversify its trade relationships.

3. Our Biggest Trade War Is With Ourselves

One of the most significant drags on Canada's economy doesn't come from foreign tariffs, but from within its own borders. Interprovincial trade barriers—an archaic attempt by provinces to protect local jobs through differing regulations and standards—are a form of economic self-sabotage.

Their cost is staggering, draining the country of as much as 3% to 4% of real GDP per capita. To put this in perspective, these internal barriers are estimated to be equivalent to an average tariff of 20% on goods moving between provinces. This is astronomically higher than the effective tariff rate of less than 1% that Canada collects on international imports.

The tax that goods have to pay to cross from province to province was already seen as something very antiquated in the European Middle Ages, but in Canada, it seems they are not as progressive as they appear.

4. We're Drowning in Debt by Investing in the Wrong Thing

Canada's housing affordability has reached "crisis levels," and it is directly connected to the country's lagging productivity. Canada now holds the worst household debt-to-GDP ratio of any G7 country, at 107%.

This crisis harms the economy in two key ways. First, high housing costs reduce worker mobility, preventing people from moving to cities where they could be more productive. Second, it forces families to divert huge portions of their income to rent or mortgage payments, which is "money they're not spending going to stores or going to restaurants."

Crucially, this has warped national investment priorities. A growing share of Canada's savings and investment has flowed into real estate and construction. As one report notes, these sectors, "while needed... are both relatively inefficient and can hold back the overall productive growth of an economy" when compared to productivity-enhancing investments in machinery and intellectual property.

5. We Want the Government to Cut Spending... And Spend More

According to polling from the Angus Reid Institute, public opinion on government spending is deeply contradictory, creating a complex challenge for policymakers.

A clear majority of Canadians—three-in-five (59%)—believe the federal government is spending "too much" and that cuts are needed to rein in finances. At the same time, an even larger majority—two-thirds (67%)—want to increase government spending on health care.

The most telling statistic reveals the paradox: even among the 59% of Canadians who say the government spends too much overall, most of them still say there should be more funding for health care. This conflicting public demand makes it incredibly difficult for any political party to forge a clear path toward solving the country's deep-seated fiscal challenges.

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Conclusion

Canada's economic problems run deeper than typical headlines about inflation or interest rates. They are structural, complex, and often spring from surprising sources—our historical stability, our natural advantages, and even our own internal borders.

Solving these issues will require more than policy tweaks; it will require a new national mindset. So, what will it take for Canadians to develop a collective focus on the future—one that rewards innovation, celebrates competitiveness, and confronts these uncomfortable truths to finally solve the country's productivity puzzle?

Immigration Canada

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Securing Canada’s Future: How to Break Free from Stagnation and Build Prosperity for Youth