How Canada Could Become the Third or Fourth Largest Economy in the World by the 2040s

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Canada could become the third largest economy in the world by the 2040s. Canada has more than doubled its population growth rate to 2.7% to 3.0% per year in the last two years. This is adding 1.0 to 1.3 million people per year. Canada is mainly adding college educated people from India, Asia and Europe. The people added are able to integrate into the economy at the level of Canada’s per capita income and many professionals can even increase the per capita income. IF Canada continues to add about 1.2 million people per year then Canada reaches 50.0 million people by 2031 and 60.0 million by 2040. This would be a 50% increase by 2040.

UPDATE: I have an articles that explains and provides evidence that Japan, Germany, UK, France and Italy have all already hit the demographic and economic wall.

Canada’s economy (nominal GDP) is currently 38% smaller than France and 50% smaller than the UK. The population of France and the UK is likely going to remain flat or even shrink from now to 2040.

Canada’s population would increase to the point that the USA would only have 6 times as many people as Canada versus 8.3 times more people now.

IF today Canada had 50% more people and the same GDP per capita, then Canada and the UK would be virtually tied for 6th largest world economy.

IF Canada had 1/6th the US population now and the same per capita income, then Canada would have $4.5 trillion in GDP today. This would put Canada ahead of Japan for third largest world economy.

Future Shrinking and Aging Populations in Japan and Germany and Other Countries

In the 2040s, Canada would likely still be aggressively growing population through immigration of college educated professionals. Canada could have over 70 million people by 2049. This would be 75% more population than today. Thus would only put Canada at about a future inflation adjusted $3.7 trillion level which would be about the level of India. However, Japan and also to some extent Germany will see their population crater. Japan will lose 20% of its population by 2049 to under 100 million from 122 million today. Germany should also shrink about ten percent in population. Japan and Germany would also see per capita GDP shrink. Japan’s median age will go from 48.5 today to 55 years of age. Germany’s population will also age significantly.

France and the UK will also have populations with more aging problems than Canada.

China’s population could drop to 1.1 billion and have an average age over 50 by 2049. China’s future demographics are terrible. China’s economy will still be much larger than Canada. However, China will need to have a lot of other things go right economically to overcome forces that could nearly halve its economy by 2050.

27 thoughts on “How Canada Could Become the Third or Fourth Largest Economy in the World by the 2040s”

  1. LOL…so why isn’t India the most productive nation with the highest GDP? The top 10 nations are self regulating mono cultures with a cohesion not based on Orwellian ” diversity is our greatest strength” slogans.Most of Canada’s population is based within 100 miles of the 49th parallel and primarily in 3 overstressed urban centers.The future will NOT be based on imported opportunistic migration from failing countries but will based on AI, automation, robotics, inovation and a new unipolar world with its own non fiat currency now being challenged by BRICS.Everything in this article is contra to reality and ignores Canada’s incoherent governments and refusing to address the demographic elephant in the room that even Statscan admitted, the only labour shortage is in service type jobs requiring a high-school or less education.

    • Robots/A.I. and automated factories do NOT consume towards profit generation and pay taxes. Over the long-run increasing automation will destroy/collapse capitalism into long-term stagnant economic performance/lack of growth. World Wars I and II are testament to such economic downturn as a function of increasing automated industrialization.

  2. Canada will never become the 3rd or 4th economy in the world for a few reasons:
    1. Canadians are not ambitious.
    2. Bureaucracy and the three mediocre parties.
    3. Lack of talent – immigrants are largely labour and innovators.
    4. Unions make CANADA expensive and unable to compete.
    5. Economic dependency on USA.

    The list can go on and on. Be realistic!

  3. There’s a lot of cherry picked data here. You are looking at the highest year of growth population wise (there was catch-up from pandemic years where immigration was below target, we do not typically take close to 1M immigrants in, it’s more like half that number and the quotas remain at that number.

    #2 looking at GDP per capita your failing to take into account that Canada has consistently been lagging behind in productivity growth vs other developed Nations. Unless they manage to reverse that trend, it means our population growth will have to be larger than the current ratio suggests to achieve the same sized economy

    #3 with the world ageing fast there’s probably new dynamics that are probably going to come in play. Other Nations may increasingly embrace immigration or try to incentivize their people not to leave. Immigrants will be harder to compete for especially top of the line educated immigrants.

    I would not go under the assumption that other Nations won’t ramp up their immigration as well at some point and that Canada will always compete for such a high number with ease

    #4 we have a serious housing crisis and infrastructure struggling to keep up that has gotten way worse since the massive population boom and that huge growth started only a decade ago or less. I would not be so bold to assume we will be able to withstand this growth for another 2 decades unless they get creative in ways to get housing and infrastructure built faster

  4. Perhaps.
    But will they have any worthwhile Customers, Allies, or sphere of influence at the end of this decade? Doubtful. Aligned with the other rogues, outcasts, ne’er-do-wells, they will be the head Slum Lord of the Slum countries. China or India as ‘forever friend’ neighbour unlikely. Without the ability to use fossil fuels, 20th century weapons, a useful or recognized widespread language or currency, or a reputable space, EV, or AI industry to gain influence or prestige, how do they expect to motivate their population, facilitate trade or advance technology? Either oil will be so expensive that the small number of customer countries left will ill-afford full loads or growing technology, –or– so cheap that those same customers, fully loaded, will barely be able to supplement Russia’s economy and pocket-book. When Russia loses the remaining Ukraine territories over the next several months – either fully to international borders -or- as zombie zones ungovernable and constantly undert threat of terrosim or other unproductivity and conflict, Russia will be forced to a reckoning of its outdated and frankly limited future as anything but a has-been, bully federation of gangster states stuck in their glory years of pre 1990.

  5. A-Intelligence will likely kill everyone, especially in modern, “advanced” economies, not to mention the need for college educated folks, long before 2050. Kiss your certificates goodbye and grab an adze or a hoe. The truth is, this would not be such a bad scenario for the environment. But, 30 years is a long stretch in this day and age to say anything with too much certainty.

  6. Average IQ is the best predictor of GDP of a country. So try to use that in your predictions.

    • Perhaps. But you’ll notice that the charts aren’t separated or differentiated much for regions, ethnicity, new-arrival status, urban, rural, age, etc. There may be certain demographics that are skewing it poorly. (i know that some US data services disallow modeling using some ‘sensitive’ cultural data)

  9. Canada dependency ratio started to rise in 2010 and interestingly, Canada gdp per capital stagnant since then. Future doesn’t look bright for Canada.

  10. Canada haven’t been innovative in the past 23 years . Also their current generation hates cheap energy. It’s hard to grow when you don’t support cheap energy like what China 🇨🇳, Brazil 🇧🇷, etc is doing

    • Pretty much. You can import all the Indian Ph.D.’s you want, and they won’t do you a bit of good if your government is deliberately pursuing an economy crushing agenda.

      Canada was never as free market as the US, at present they’re going “woke” so fast they’re leaving a vapor trail.

      • US free market capitalism is over rated and based on their post World War II dollar hegemony as a function of the Bretton-Woods Accord. Consider for a moment how the US free market approach drove the global economy to collapse during the 1930s and again in 2007-2009….it’s a wasteful/over rated economic system.

    • In the last 12 years since blackberry and NORTEL telecom died Or declined sharply in the former, Canada has been very innovative in early 2000s to about 2010 we still had the best optics communication companies on earth that all eventually declined or had massive data breaches overcome them and the government not caring to prop any of them afterwards. We have been innovative just not late lately 23 years is a little farfetched lol

  11. It’s of course possible, everything that doesn’t break laws of nature is theoretically possible.

    It’s possible that some genius lives in Lithuania (country with 2,8M people) and he will be the guy who will figure out algorithm for AGI/ASI and due to first mover advantage, this will make Lithuania 3th largest economy with $50M per capita GDP in 2033 or so 🙂

    But in my opinion, more likely scenario is situation that (mostly due to rapid technological development and various innovations – like cheap evergy breakthroughs, more advanced and cheap mass manufacturing of all kinds of goods) world will more or less converge in standards of living before 2050 and there won’t be large scale migration in near future.

    Economically Canada will be, where their population at he time will be, so somewhere between 30th-50th place in terms of GDP size (assuming migrants will go back to their homes).

    Like I said in my previous post, majority of current immigrants will go back to their homes. This includes EU countries.They don’t love Canada and Canada’s culture. Main reason why Canada is attractive to all these people is higher starndard of living, higher salaries. As soon as they will be able to have decent living in their home countries (afford buying nice apartment, cars, modern gadgets) by doing the same kind of work as they do in Canada, they will go back. They’re in Canda only for money.

    • You appear to have a very positive (or 21st century socio-techno-economic for all) view of our future ‘entire’ world – I certainly do not.
      I truly don’t believe that the world will ever converge on a more-or-less similar level of GDP, technology-innovation, and more importantly: individualistic, pro-work entrepreneurial culture. Culture. It will diverge and segregate and become ‘tiers’.

      It’s easy to look at east european countries and south-east asian countries that are in the G20 or almost and think:
      look – they all have smartphones, many BMWs/Audis, ok 3E+ coverage, access to westernized goods, food and retail chains, and other such 20th-21st century loot.
      They are so close and getting closer to the top G7 trail-breakers.
      Nonsense. For that is not a true measure of success or cultural progress. Look at the families, neighborhoods, language, where kids go after they graduate, whether they buy their own homes, how their income/job is compared to that of their famility (class mobility), how their towns develop and improve. Stagnation. Pre-20th century, barely post-industrial values. You could teach a peasant from the 15th century how to drive or use a smartphone or post to a blog – given a local set of specific resources to them. But at the end of the day, they will continue imposing their same values on their kids, family, neighborhood, and community. Will they spread the possibilites, embrace the potential. Unlikely. First world values come from a certain core of culture with raising kids, family values, community, and the wide world available. Big Dreams. This only truly exists in a significant way in the top G7 countries and similar: US, UK, and to a lesser degree northern Europe, Canada, Australia, etc. Everywhere else this entrepreneurialism is scattered, disconnected – not reaching that critical mass that allows greatness to happen, ‘leading’ to happen. The bottom G7 and G20 and such just follow and emulate. Leader vs follower is a big deal -and will lead to further separation. But neither leader nor follower care, which is fine – except for a few – Russia, some latin american countries – craving attention and respect they don’t deserve.
      China is different though. An autocratic system with a huge group of entrepreneurial driven people – strange. Mostly repressed but occasionally let loose. China is a wild card.

      Immigration is less clear. Will they go home; break into dense communities-barely mixing; partly assimilate – mostly ok at blue collar, but less so at white collar; just try to Own or Boss or Invest (from ill-gotten, or not, homeland funds) and thus escape the real work and have locals do it – which they have resisted. A mix I gather, to the detriment and reduced improvement of all.

    • No they will never go back. They got kids in school, work, aso. It true that many of immigrants from countries that are very culturally different from the western world do not really like the west, but it does not mean that they will return to their origins.

      • Agreed – what a strange thing. Moving to a place that was far more functional and still being resentful that ‘the world would have to be this (western) way to be any kind of productive, peaceful, and technologically-advanced’. Do these people think that someday some type of free energy, insta-smart, auto-work, hyper-post-scarcity device will be invented so they could enjoy the good old days of hyper-social, idle, and unstructured existence that they feel every human being deserves within the boundaries of whatever cultural norms they first knew? An obvious mis-match between desired lifestyle -and- the work effort and ambition required to bring that around, when scaled up to a full region. Does a 40+-hr dedicated, usefull work week feel like a slavery sentence to some? Bizarre.

  12. I can’t see Canada sustaining 2.5-3% population growth for decades without major changes in how infrastructure is delivered. Canada is already groaning under the pressure of this population growth, and we can’t really build much faster without major changes.

    • Yeah in particular the cost of housing in Canada is insane. Canada is going to have to keep importing foreigners forever because no way are young Canucks having kids in this economic environment.

      Of course boomer Canadians don’t care as long as their real estate based net worth keeps going up forever.

    • This! Plus this last year was an aberation. Our immigration quota is half a million not 1 million. Covid caused delays in immigration status and arrivals and for a while we were below target now playing catch up we exceeded it. I would not expect this last year’s growth to become the new norm. Our immigration targets are 450,000 ish I believe so longer term that will be the average growth (since natural growth is approaching 0)

      Also like u said housing crisis and infrastructure are getting critical. Unless they can fix that I don’t think the growth rates we’ve seen in the last 5 years are going to be sustainable for long.

      Even if we can figure out how to build houses and transportation infrastructure, power grids etc faster and accomodation is not an issue anymore, like I said above, the rest of the world might need to start embracing immigration also given demographics. I would not assume we will attract immigrants in the future as easily as now and I would not assume other Nations predicted population decline won’t improve because that’s assuming they do absolutely nothing about it which given the seriousness of it I’m sure they will. Not every Nation is as reluctant with the idea of immigration as Japan

      Lastly I also mentioned that his calculations assume GDP per capitas stay the same. A lot of developing Countries with much higher populations have fast growing ones and Canada is lagging growth even vs other developed Countries.

      This entire prediction is incredibly unlikely and would only happen if absolutely every factor went into Canada favour which is not likely at all

      • Canada is increasing the immigration quota to 500,000 in 2025. The immigration target is not a tight target and the highend is 550000 in 2025. Canada is letting in more temporary residents (students, refugees, work permits). Those can more easily convert to permanent. Once Canada gets a critical mass of people from some country, it becomes easier to attract friends, family from that country. Canada is at 1.4 million Asian Indians and 1.8 million chinese. Canada has a business and political elite that is very pro-immigration.

        I have a public prediction track record that is 90% right. https://www.metaculus.com/questions/

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