Young Canadians Won’t Have The Same Opportunity As Past Generations: OECD Forecast

Canada is projected to be the next Greece, and not because of the good stuff. The Organization for Economic Co-operation and Development (OECD) has forecast Canada’s economy will fall behind. The group sees Canada’s real gross domestic product (GDP) per capita growth falling to last place. An expert warns young Canadians won’t have the same opportunity as previous generations. They’re also likely to fall behind their peers in other advanced economies. 

Canadian GDP Growth Has Outperformed The G7

First, let’s look at where Canadians have been over the past few years. From 2000 to 2007, Canadian real GDP per capita grew 1.6 percent per annum, tied with the OECD average. It was the highest growth of any G7 country, even beating out the United States by 0.1 points per year. Canadians were winning when it came to seeing their quality of life improve.

Once the Great Recession hit, Canada began to slow down significantly. Real GDP per capita grew 0.8% per annum from 2007 to 2020, failing to outperform the OECD. It’s in the middle of G7 performance, with only the United States and Germany beating Canada. In general, the G7 had a terrible performance during this period. 

For over a decade, G7 countries pursued what they perceived to be more advanced monetary policy. Central bank research shows some critical parts of that pursuit were wrong. Ah well, just a generation of people screwed. Better than paying 4% interest for a mortgage, amirite? 

Canada Is On Track To Becoming The OECD’s Next Greece

Canada is set to become the OECD next Greece, as long-term projections show low growth and high debt. Canada’s potential real GDP per capita is just 0.7 percent per annum, tied dead last with Italy in the OECD. This is significantly below the US (42% lower) and the OECD average (46% lower). In the previous period ending in 2020, Greece had occupied the last place spot.

OECD Real GDP Per Capita Forecast Per Annum (2020 To 2030)

OECD forecast annual real gross domestic product (GDP) per capita growth per annum.

Source: OECD; Better Dwelling.

Given all of the information we know, it doesn’t appear Canada is learning any lessons. The potential real GDP per capita forecast from 2030 to 2060 is just 0.8 percent per annum. Canada’s forecast is 20% below the US and 27% below the OECD average for the period, respectively. This is tied dead last with South Korea, putting Canada last for the next 40 years. 

Canada Won’t Provide The Same Tailwinds For Quality of Life Improvements It Once Did

A Business Council of British Columbia (BCBC) analysis expresses serious concerns. “Past generations of young Canadians entering the workforce could look forward to favorable tailwinds lifting real incomes over their working lives. That’s no longer the case,” explains David Williams, BCBC’s Vice president of policy. 

“If the OECD’s long-range projections prove correct, young people entering the workforce today will not feel much of a tailwind at all. Rather, they face a long period of stagnating average real incomes that will last most of their working lives,” he adds. 

When looking at a country, most people look at how lives have improved over the past decade. They then use this to project what the future will look like, and that’s a bad plan. Some of the policies used for growth in countries like Canada borrowed future growth. 

The value proposition will drop as other countries outpace Canada’s growth for decades. First advanced economies will close the gap between opportunities and quality of life. As they continue to outperform, Canada will fall to the other side of that gap. As Canada falls behind global standards, the quality of life will decline. 

The data shows this has already begun. Canadian Millennials have seen G7 peers advance faster over the past decade. As young Canadians face more considerable hurdles, this will weigh on their standard of living. “On average, Canadian living standards and our quality of life relative to other countries are set to decline as other countries make their economies more productive,” says Williams. 

Forecasts are based on the current environment, and things can change. However, they tend to require dramatic purges of economic inefficiencies first. Greece went through a painful adjustment that ultimately will create a healthier environment for future growth. It’s not recovering because it doubled down on loading up the country on debt. 

“Long range projections are not certain. But in providing a glimpse of a possible future, they offer us an opportunity to reflect and make a course correction lest they become a reality,” he adds.

Canada has embraced cheap growth by way of residential investment and debt. This works short-term, but residential investment is non-productive with little contribution to future growth. Debt is the value of future productivity borrowed and used today, leaving less for the future. The more the country leans on these drivers, the more painful it will be to try and correct the course.



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  • Gary 2 years ago

    I think that became painfully obvious when older generations saw their home rise in value by $200k/year and the country just determined young people just can’t own because even small towns ran out of land.

  • Jappan Singh 2 years ago

    I can imagine people queue at the border to get a work permit to move south for a fair shot at opportunity.

  • Jonathan 2 years ago

    no Young people won’t have the same opportunities.. they’ll have way better opportunities! with the ease of access of everything these days, commission free trading, crypto, social media, so many more opportunities than you did in the past generations.

  • Alex 2 years ago

    As a so called young Canadian I am not entirely worried. The past two administrations taught the future of this country how not to create an economy i.e speculating on real estate and oil. There is time yet for recovery once this real estate bubble finally collapses in on itself which I believe will be within 3-5 years.

    I said this a few months ago, but the BoC ending QE much earlier than the fed despite a lower core CPI reading is incredibly bearish for real estate, and I would take it as the first sign of acknowledgement of a housing bubble by the BoC and our current government. I predict slowing growth due a massive liquidity gap created by Covid debt overhang and an inability to enact stimulus due to a looming threat of currency debasement will ultimately lead to a massive valuation compression on housing.

    • Jeff Graham 2 years ago

      I think JT and his crew will let the Loonie implode before they let housing implode. I wish that wasn’t the case, but it just seems to be their MO.

  • Chris 2 years ago

    Canada politicians need to be held to account for their reckless selfish behaviour. Canadian housing needs to be allowed to return to levels supported by fundamentals. Stop the artificial suppression of mortgage rates. Stop international buyers. Stop corporations from purchasing residential non rental purposed real estate. And mostly, Stop domestic speculation through massive land transfer tax (30%+) for any secondary property. I agree this is a demand issue. The time for action is now. The longer this continues the more harm it’s will inevitably cause.

  • James M 2 years ago

    “…But.. but… Canada is Back!!”

    “Mirror, Mirror, on the wall… Who’s the Wokest of them all?? Me? Ok, good.. Now, more money for Identity Politics, special interest groups and whomever feels they’ve been ‘wronged’…. And top up the CERB and CWB while we’re at it.. What’s a few more billion dollars for those who haven’t figured out their shit/how to work in the last 2 years? ….”

    Trudeau hasn’t worked a day in his life. Yet who’d we put in charge of ours and our children’s future.

    • Jeff 2 years ago

      But he has nice hair James! Doesn’t that count for something?

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