Since the late 2000s, Canada’s economic slowdown has been debated in terms of technological fatigue, demographic trends, monetary constraints, and global trade headwinds. This paper contends that the underlying source of stagnation fundamentally points to distributional imbalances and structural demand deficiency. Today’s stagnation is not cyclical, but a symptom of a structural trap—a regime of distributional stagnation rooted in the failure of the neoliberal paradigm to reconcile economic growth with social equity.
This analysis situates Canada’s stagnation within broader debates on “secular stagnation” and macroeconomic paradigm choice, drawing on leading theories that emphasize the role of demand, inequality, and institutional decline. There are three structural channels through which income inequality drives stagnation: (1) reduced household consumption due to top-heavy income distribution; (2) erosion of labour power weakening wage growth and demand; (3) a disconnect between rising profits and falling productive investment.













