The Organisation for Economic Co-operation and Development (OECD) says Canada must make some strategic changes to help boost its economy, regardless of trade tensions with the US. Canada’s economy has come under immense pressure amid these trade tensions. Tariffs have weighed on consumer and business confidence and are expected to slow economic growth. In its most recent Canadian economic survey, the OECD found a few measures that could help boost economic conditions in Canada.

• The OECD projects that Canada’s economy might expand by just 1% this year, down from the 1.5% pace of growth last year. The OECD expects tariffs to weigh on economic activity, which could result in more fiscal and monetary policy support.
• The economic organization says Canada should focus its policies on boosting productivity. Canadian productivity has lagged much of the world. However, the government can take steps to increase productivity. This could include removing internal trade barriers and introducing measures to help businesses invest more into research and development.
• Removing internal trade barriers includes boosting interprovincial trade and eliminating barriers to labour mobility. A recent survey from KPMG showed that 64% of business leaders who responded believe improving interprovincial trade and coordinating regulations will help boost Canada’s productivity.
• The OECD’s survey also found that housing affordability is another area of concern. Home prices have surged higher in recent years, raising affordability concerns. The OECD believes Canada must expedite approval times for new construction and allow for greater zoning changes.

Canada’s economy has entered a challenging phase as its trade relationship with the US becomes contentious. However, the Canadian business community and government can look to take tangible actions to help the economy grow over the long term. While the economic relationship with the US is critical for Canada, the country has to nurture other trade relationships with major economies around the world and look for organic growth.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.