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
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Canada has fallen from the 6th most productive economy in the OECD in 1970 to 18th today.
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Canadian workers now produce only 71% of the output per hour of their U.S. counterparts.
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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
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Youth unemployment reached 14.6% in 2025, double that of core-age workers.
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More than 850,000 young Canadians (15–29) are Not in Employment, Education, or Training (NEET).
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Underemployment and involuntary part-time work are scarring young workers’ long-term earnings and career prospects.
3. Structural Weaknesses
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Interprovincial trade barriers cost Canada up to 4% of GDP per capita.
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Housing affordability has collapsed, with prices doubling in just 10 years.
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Household debt stands at 171% of disposable income, the highest in the OECD.
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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:
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Lost innovation and competitiveness.
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A generation of young people at risk of permanent detachment from the workforce.
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Families struggling under crushing housing and debt burdens.
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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:
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Germany & Switzerland: Dual apprenticeship systems that integrate classroom and workplace learning.
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Singapore: The SkillsFuture program, offering every citizen learning credits to continually upskill.
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Australia: Automatic Mutual Recognition (AMR) of professional licenses across states, reducing barriers to worker mobility.
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New Zealand (Auckland): Up-zoning reforms to rapidly increase housing supply.
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London, UK: Congestion pricing to cut traffic, improve productivity, and fund transit.
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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
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Eliminate interprovincial trade barriers through mutual recognition.
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Streamline project approvals and cut red tape.
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Reform the tax system: shift toward consumption taxes (HST) while reducing income tax burdens.
Pillar 2: Build a High-Value, Innovation-Driven Economy
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Boost R&D spending with targeted direct subsidies in advanced sectors.
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Incentivize AI and technology adoption for small and mid-sized firms.
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Move exports up the value chain—support domestic manufacturing of refined and advanced products.
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Modernize ports and logistics to diversify trade beyond the U.S.
Pillar 3: Activate the Workforce, Especially Youth
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Expand apprenticeships, internships, and co-ops linked to future skills.
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Recognize foreign-trained credentials faster to reduce underemployment of immigrants.
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Invest in youth entrepreneurship with training and access to capital.
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Update labour standards: eliminate unpaid internships, regulate placement agencies.
Pillar 4: Ensure Fiscal Prudence and Stability
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Conduct systematic spending reviews for efficiency.
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Reduce deficits over the medium term to stabilize debt-to-GDP.
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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:
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Productivity: Close 25% of the gap with the U.S.
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Trade: Reduce U.S. export share to 65%, while improving port efficiency rankings.
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Youth Employment: Reduce NEETs by 250,000; cut unemployment gap by 3 percentage points.
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Housing: Increase completions by 25% and stabilize rent growth to at or below CPI.
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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:
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Federal, provincial, and territorial governments working together.
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Businesses investing in innovation and people.
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Educational institutions aligning skills with the jobs of tomorrow.
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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.
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