Canada’s capital is stuck in the wrong assets. Why that’s a problem
Canada’s capital is stuck in the wrong assets. Why that’s a problem
In 2024, Canada allocated a larger share of its total fixed capital formation to residential real estate than any of the other top 20 economies. ... the trend has been building for nearly two decades, peaking in 2021 before moderating slightly.
Yet despite substantial residential construction in Canada, affordability challenges persist.
Of that total investment, roughly one-third flows into residential real estate, leaving only about 15 per cent for machinery, infrastructure and intellectual property. That imbalance may constrain the productivity growth needed to sustain higher wages and living standards. It could also help explain the continued dominance of legacy firms in the Canadian economy.