Real estate along with oil and gas have been the prime movers of the Canadian economy for decades—a state of affairs that has led to the stagnation of national wealth, according to an independent non-profit research organization.
In its latest report, the International Institute for Sustainable Development (IISD) argued that much of the economic strength and diversification of Canada stems from the housing industry and the extraction of oil and gas.
Together, the sectors accounted for around 70 per cent of growth for the past few decades, with produced capital increasing by an average of 1.68 per cent annually.
The IISD warned that this represents a potentially hazardous combination of factors, as the Canadian GDP will have no strong legs to stand on should one or both of these sectors experience a downturn—a point driven home more clearly by the petroleum price crash and by the government’s recent authorization of two expanded oil export pipelines.
“What we’re saying is this is a roller-coaster; we know it’s a roller-coaster,” IISD president Scott Vaughan stated in an Ottawa press conference on Thursday (December 1), as quoted by The Canadian Press
“What goes up tomorrow will come down again. If you're looking at what are the long-term trajectories to build Canada's wealth, we're saying we need to move on this [low-carbon] transition now.”
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