The Carney government has set as “core mission” boosting Canada’s economy. And for good reason.
Slow economic growth, flat-lined or declining business investment, and poor productivity have contributed to declining average living standards. Progress on these economic challenges won’t solve all of the country’s problems, but it would certainly help.
Start with some facts. Between 2016 and 2023, Canada experienced a dramatic demographic shift. The country welcomed an average of more than 600,000 newcomers annually—or roughly double the intake seen in the 2000s. This surge made Canada the fastest-growing country in the G7. But while our population has been growing quickly, our economy hasn’t kept pace.
Canada’s real GDP per capita has stalled—flatlining in recent quarters and showing weak growth over the longer term. Between 2015 and 2024, we saw only a 1.7 percent increase in real GDP per capita. That’s the second lowest among OECD countries. Over the same period, the United States saw more than 10 times that rate of growth.
The trendlines are even more concerning when we look ahead. In 2010, Canadians enjoyed average living standards that were roughly 87 percent of their American counterparts. The IMF now projects that by 2030, our real GDP per capita will fall to just 73 percent of U.S. levels. A decade ago, we were within striking distance. In the decade to come, we risk becoming an economic underperformer in relative—and even absolute—terms. Canada, in short, is increasingly the sick man of North America.
And it’s not just a theoretical problem. Stagnant GDP per capita shows up in the form of squeezed household budgets, rising discontent, and growing pessimism. It means less dynamism, fewer opportunities, and a diminished quality of life.
The OECD projects that Canada will experience the slowest growth in real GDP per capita among its member countries between now and 2060. The worst, in other words, may still be ahead of us—unless we act.
The roots of the problem, as mentioned, are many and mutually reinforcing.
Productivity growth has been anemic. Business investment remains persistently weak. Entrepreneurship rates are in decline. And the parts of the knowledge economy—digital services, science and technology, and intellectual property—that increasingly drive economic growth in advanced economies remain underdeveloped and underleveraged in Canada.
We’ve added people to the country, but we haven’t built the infrastructure, housing, or business climate to properly accommodate them or integrate them into the economy. As a result, costs have risen, affordability has plummeted, and economic gains have been spread too thinly.
There are no easy answers. But the answer cannot be to accept mediocrity.
If we want to reverse this trend, we need a new reform agenda—a modern blueprint for growth and prosperity that aspires to something more than just managing decline.
This agenda ostensibly starts with a renewed focus on productivity—the single most important driver of long-term living standards. That means boosting business investment, accelerating the diffusion of new technologies, and reimagining our tax and regulatory environment to reward ambition rather than punish it.
It may also cover policy issues like the complexities, distortions, and perverse incentives in the federal tax code. Or the link between housing supply and economic mobility. Or using our immigration policy not merely as a source of population growth, but as a tool to attract talent, spur entrepreneurship, and plug skills gaps. Or strengthening the post-secondary sector to ensure that students are acquiring competencies and skills for the modern economy. Or even ensuring that there are available and affordable childcare services that allow parents to participate in the economy of tomorrow.
The key point is that reversing Canada’s secular stagnation and boosting living standards will necessarily draw on a wide range of policy issues and policy tools. It will require drawing new and different ideas and voices into the public policy conversation.
That’s why we’re proud to announce that this year’s Hunter Prize for Public Policy is dedicated to awarding the best ideas to strengthen Canada’s economy and raise living standards. Thanks to the generosity of the Hunter Family Foundation, the Hunter Prize will grant up to $50,000 in total prizes for such growth-enhancing ideas.
Think of it as a challenge to Canadian policy scholars and practitioners, as well as anyone interested in public policy: help us solve this wicked problem. You can find submission details here.
The question is this: Canada’s population is growing faster than its economy. As a result, real GDP per capita is stagnating and falling behind our peers. What policy reforms could sustainably increase Canada’s GDP per capita over the next decade?
It’s not an easy question. But it’s the right one. It should indeed be the core mission of Canadian public policy. If we can answer it well—if we can begin to close the gap between our aspirations and our outcomes—we can write a new chapter in the Canadian story. One that offers opportunity, mobility, and prosperity for all.
It’s time to take up the challenge. Good luck to this year’s Hunter Prize participants.
