A strong economy and labour market are integral to Canada’s future growth. Canada needs economic security in a rapidly changing world, where many of our usual assumptions about the global economic system are being challenged. To grow sustainably over the rest of this century, Canada must increase the innovative capacity of our economy and the quality of our jobs.
This section explores indicators related to the economy, labour force, and entrepreneurship.
The report highlights the need to support inclusive and sustainable economic growth and to close gaps in employment and entrepreneurship opportunity. It also discusses the significant impact of Covid-19 across Canada’s economic, employment, and entrepreneurship landscape.
While Canada is not currently in the top 10 among OECD countries, its GDP per capita has steadily increased in recent years, and Canada was above the OECD average in 2019. Nonetheless, the OECD average GDP per capita has increased at a faster rate than Canada’s GDP per capita over the past decade. Canada had previously been closer to the OECD top 10 in 2010 (ranked 11th) but has since moved down in the rankings.
Canada ranked 15th out of 37 OECD countries in 2019.
Canada had a GDP per capita of $50,666.14 USD in 2019.
Top 10 OECD countries.
Threshold: 10th in 2019 was Germany with GDP per capita of $55,891.16 USD in 2019.
GDP per capita reflects the standard of living as assessed by average income per person. It is an important, high-level measure of Canada’s overall prosperity, though not its distribution. Beyond the immediate shock, Covid-19 could have further negative impacts on Canada's economic growth in coming years.
Canada has consistently ranked in the top 5 in recent years in terms of its entrepreneurship ecosystem.
Canada ranked 3rd out of 137 countries in 2018.
Canada scored 79.2 out of 100 in 2018.
Top 5 on the Global Entrepreneurship Index.
Threshold: 5th on the 2018 index was Australia with a score of 75.5.
Entrepreneurship ecosystem covers the preconditions and health of the environment for business growth in Canada (i.e. attitudes, resources, and infrastructure) though not growth itself. Entrepreneurship is an important factor in economic growth. There are opportunities to further strengthen the ecosystem in targeted areas for growth, including within Indigenous and Black communities.
Canada has been trending in a positive direction in recent years with the number of high-growth firms increasing from 11,140 in 2016 to 11,920 in 2018. However, this rate of increase is insufficient to meet the goal of doubling the number of high-growth firms in the country.
There were 11,920 high-growth firms in Canada in 2018.
Meet a federal government target to double the number of high-growth firms in Canada between 2015 and 2025.
High-growth firms are defined by Statistics Canada as having average annualized revenue growth greater than 20% per year over a three-year period, having at least 10 employees at the start of the three-year period, and having been in operation for at least four years. The number of high-growth firms in Canada provides insight into Canada’s innovation, productivity and competitiveness.
While Canada's productivity has seen mild improvement over the past 20 years, it is still well below the target. Canada has a notable productivity gap compared to similar countries.
Canada ranked 18th out of 36 OECD countries.
Canada's GDP per hour worked was $52.68 USD in 2019.
Top 10 of OECD countries.
Threshold: 10th in the OECD was the Netherlands with GDP per hour worked of $67.63 USD in 2019.
Our healthy innovation ecosystem is not being complemented by sufficient productivity-enhancing investments (i.e. technology, capital, economies of scale, and skills) that would lead to the growth of globally competitive firms. Low levels of productivity threaten our future growth and prosperity.
Business spending on research and development as a percentage of GDP has been on the decline in recent years, while it has risen among other OECD countries. Canada is well below the target of the OECD average.
Canada ranked 21st out of 34 OECD countries in 2018.
Canada's business spending on research and development was 0.79% of GDP in 2019.
Meet a federal government target to keep pace with the OECD average.
Threshold: OECD average was 1.68% in 2018.
Business spending on research and development is an indicator of the private sector's support for innovation: a key driver of growth. Looking beyond business spending to all investment in research and development, Canada is still a laggard and there are few signs of improvement.
Canada's percentage of the working-age population participating in the labour market has been increasing in recent years. Canada is now in the top 10 of OECD countries, despite recent declines in its ranking compared to other countries. Covid-19 has had a significant detrimental impact on Canada’s labour force participation rate. Work will be required to stay on track.
Canada ranked 9th out of 37 OECD countries in 2019.
Canada's labour force participation rate among 15 to 64 year-olds was 78.97% in 2019.
Top 10 of OECD countries.
Threshold: 10th in the OECD was Estonia with a rate of 78.83% in 2019.
The labour force participation rate serves as an indicator of the strength of Canada’s labour force and the degree to which Canadians are working or looking for jobs. Broad participation in the labour force is needed to support Canada’s prosperity. Participation is not evenly distributed across the population, with barriers to employment based on race, gender, and Indigenous status.
The proportion of paid workers covered by a registered pension plan in Canada has declined over the past two decades—from 40.6% in 1998 to 37.5% in 2018. The declines are more significant in relation to defined benefit plans – from 34.7% to 25.2%. While there have been some recent small increases in the proportion of workers in registered pension plans, rates are still much lower than in past decades.
The percentage of paid workers in Canada covered by a registered pension plan was 37.5% in 2018.
Trending toward an increasing rate of workers covered by a registered pension plan.
Many factors impact job quality and no single indicator can account for all of them. Pension arrangements provide important insight into changes in Canada’s employment landscape. Workers in non-standard forms of work like gig workers are less likely to have access to pensions. Covid-19 is likely to accelerate these trends. Growth in Canada should lead to higher quality employment that provides a fair income, as well as security and social protection.
Canada is “bottom-performing” in terms of its levels of household debt compared to other OECD countries. The percentage of net household disposable income has steadily grown over the past two decades from 117% in 2000 to 186% in 2019.
Canada ranked 26th out of 33 OECD countries in 2018.
Canada’s level of household debt was 185.76% of net household disposable income in 2018.
Top 10 of OECD countries.
Threshold: 10th in the OECD was Estonia with 79.1%.
Household debt typically reflects the economic vulnerability of the financial and housing sectors. High levels of household debt also impact well-being. A recent study found that seniors with high levels of household debt are more at risk for mental health challenges and lower levels of well-being. Canada also has among the highest levels of debt relative to GDP among OECD countries.