Canada leads OECD nations in prioritizing housing investment over intellectual property development, a trend that threatens the country’s productivity and competitive position.
New OECD data shows Canadian investment in residential property exceeds intellectual property spending by 25.7 percentage points, the highest gap among developed nations. This imbalance significantly outpaces similar housing-focused economies like Mexico at 22% and New Zealand at 17.3%.
“Canada is effectively trying to compete while running with a backpack full of bricks,” says David Watt of Watt Strategic Economic Advisors. “Investment in dwellings is too high – yet we have a severe housing supply problem – and investment in IP products is too low.”
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The disparity highlights a concerning paradox in Canada’s economic strategy. While the country pours capital into residential development, it lags dramatically behind innovation-focused nations like Ireland, which invests 35.5% more in IP than housing, and the United States, which maintains an 8.1% advantage in IP investment.
This investment pattern points to deeper structural issues in Canada’s economy. Despite massive residential investment, the country still faces acute housing shortages. Meanwhile, the relative underinvestment in intellectual property and productivity-enhancing technologies threatens to weaken Canada’s competitive position in the global knowledge economy.
The data emerges as part of The Globe and Mail‘s survey of experts examining key economic indicators to watch in 2025, with Watt identifying this investment imbalance as a fundamental challenge to Canada’s productivity performance.
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