Canada, once praised for its economic resilience during the 2008 global financial crisis, has now become a cautionary tale because of its struggle to adapt to a rapidly changing global landscape.
A recent article by Rockefeller International chair Ruchir Sharma in the Financial Times notes that the country has experienced the worst per capita GDP growth rate among developed economies in the top 50 since 2020, with an annual decline of 0.4%.
In the article, he suggests that Canada missed opportunities to capitalize on the shift towards technology-driven growth, instead remaining heavily reliant on its commodities sector.
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The private sector investment has been largely concentrated in the property market, which contributes “little to overall productivity and prosperity,” with many young Canadians finding themselves priced out of one of the world’s most expensive housing markets.
Canada’s digital economy has also lagged behind, with Shopify (NYSE: SHOP) being the only tech company among the country’s 10 largest enterprises. Even Shopify’s shares have dropped to half their 2021 peak value, further highlighting the challenges faced by the tech sector.
Worse, Sharma points out: “New investment and job growth is being driven mainly by the government.”
Related: Canada’s Public Sector Bloat Masks Struggling Private Job Market
Sharma identifies Canada as one of several “breakdown nations,” along with Chile, Germany, South Africa, and Thailand. These are nations that have experienced sharp declines in real per capita income growth and a decrease in their share of global gross domestic product.
These countries, “led by Canada,” now serve as a stark reminder that sustaining economic growth is a complex and ongoing process.
“The takeaway here is not that smart countries somehow turned stupid. It is that hidden traps line the path of development and can spring on nations at every income level from the middle to the rich. One basic mistake or miss, and any country can find itself stuck — until it finds the leadership and vision to chart a way out.”
Information for this story was found via the Financial Times, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
