For years policy experts have been lamenting the loss of Canada’s best and brightest.
Tech startups, medical professionals, the Ryan’s — Reynolds and Gosling — have all sought their fortunes in the U.S.
But in the story of Canada’s brain drain, perhaps the most dramatic trend is happening from within.
Maybe you noticed it at your last high school reunion. The math whiz? She’s a CPA for a real estate investment firm. The smartest guy from your class, the one who helped you with your chemistry homework? He does mergers and acquisitions.
Personal anecdotes aside, according to Stats Canada data, between 2008 and 2025, job growth in finance, insurance, real estate, rental and leasing sectors outpaced all goods-producing sectors combined.
Indeed, talent and capital isn’t just being enticed to move south of the border, but also away from sectors of the economy that make a profit from creating and doing things, to the ones that make profit from manipulating and speculating on existing assets.
So while Canada faces a STEM shortage that threatens our economic competitiveness, construction sites can’t find enough tradespeople, and a scarcity of doctors is now a crisis, our business schools have little problem filling classrooms.
In fact, the most common field of study for university students is business management, marketing and support services.
You’d think an increase in business education students would be a shot in the arm for Canadian entrepreneurship, yet few choose to start businesses.
Instead, new grads are snapped up by real estate investment firms or financial services companies. The preferred industry of employment for McGill B. Comm grads? Finance. The most common subindustry? Investment management.
And for professionals working in the real economy — building things, providing services — the FOMO can be enticing.
Job boards reach out to engineering grads on how to break into the high-paying field of finance, while real estate gurus make YouTube videos on how to invest in the new Canadian Dream: owning a rental property.
All of this should come as no surprise.
As asset prices rise faster than wages, Canadian talent is following the money. Unfortunately, that money is shifting toward nonproducing sectors of the Canadian economy.
Investment in Canadian dwellings as a percentage of GDP was worth more than 40 per cent, according to a 2023 ReMax report, higher than in any other G7 country.
Even with housing starts at historic lows, price hikes have meant that real estate, including rental and leasing, contributed more to GDP than both manufacturing and oil and gas. While more capital is being diverted into the residential housing sector, capital investment per worker fell about 20 per cent between 2006 and 2021.
Why risk your capital to build a factory, or new tech — or anything else for that matter — when you could see safer, higher returns buying and renting single family homes or speculating on farm land?
This misallocation of talent and capital doesn’t just redirect resources away from jobs and investments that could improve Canadian productivity and quality of life, it also stifles those trying to make a real living in the real economy.
As investors drive up real estate prices, households have less to spend as businesses divert resources away from hiring and innovation to meet rising rental and input costs.
And as speculators drive up the cost of farm land don’t be shocked to see your grocery bill spike an expected six per cent.
Do we need good asset managers? Absolutely. Is all real-estate investment bad? Of course not.
But according to the Bank of Canada, we have a productivity problem, and according to anyone who’s looked at their credit card statement, we also have a cost of living crisis.
To solve both, we need to rethink where we deploy both talent and capital — instead of just buying and selling real estate.
Sooner or later, we’re going to have to make something.
