Canada needs to boost productivity and housing affordability: OECD report

The Canadian flag flies atop the Peace Tower on Parliament Hill in Ottawa, Wednesday, Oct. 30, 2024. (THE CANADIAN PRESS/Sean Kilpatrick)

OTTAWA — A new report by the OECD says Canada needs to boost productivity and housing affordability to strengthen growth as it faces trade uncertainty and U.S. tariffs that are taking a bite out of the economic outlook.

The latest OECD Economic Survey of Canada says government spending and interest rate cuts may be required if the economy deteriorates significantly, provided tariff-related inflationary pressures remain under control.

The report says the Canadian economy has been resilient, but per capita GDP growth has been weak, particularly compared with the U.S.

It says structural policy reforms should focus on improving productivity, housing affordability and climate adaptation.

It added that reducing internal trade barriers and improving recognition of qualifications across provinces to lower internal barriers to labour mobility can help strengthen productivity.

The report projected GDP growth for Canada falling from 1.5 per cent in 2024 to one per cent in 2025 and 1.1 per cent in 2026.

This report by The Canadian Press was first published May 26, 2025.

The Canadian Press