Canadians enjoy the highest level of wealth of any people among the G7 countries, but our "unsustainable" way of growing the economy means we're burning through that wealth, and setting ourselves up for harder times ahead.
That's the conclusion of a research paper from the International Institute for Sustainable Development, which pointed to "the depletion of many of Canada's natural resources" as a major source of the problem, along with the increasing flow of money into the housing market instead of other parts of the economy.
The IISD paper, released last fall, points to data showing that Canada has the highest level of wealth among the dominant G7 economies. But it's also the only country where that wealth has been shrinking in recent decades.
While most G7 countries have seen their wealth grow by around 1 per cent per year since 1990, in Canada it has been shrinking by about 0.25 per cent per year.
If this keeps up, Canada will lose its status as wealthiest G7 country to Japan within five years, and will be near the bottom by the end of the 2030s, the IISD report predicts.
Part of the reason why Canada's wealth is stagnating is that Canadians are shifting ever more of their money to housing, which — other than providing shelter — is not a very productive part of the economy.
As wealth flows into houses, it fails to flow into financial markets, which helps explain why the Toronto Stock Exchange has seen among the worst returns of any major stock market in recent years.
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