The OECD has released its first analysis of Canada’s economy in two years, and while it sees economic growth strengthening, the report contains warnings about the housing market, growing inequality and a growing regional economic divide.

The organization representing 35 advanced economies says inequality is growing in Canada at a considerably faster pace than the OECD average. Disposable income inequality grew 11 per cent in Canada since 1995, compared to an average of 2 per cent, making Canada the 12th most unequal country among OECD members.

But the OECD notes much of the increase took place in the late 1990s. Greater inequality in wages paid, combined with fewer government transfers of wealth, contributed to the trend, the report said.

The report also notes that housing affordability in Canada “is a concern.” Measuring house prices against incomes, the OECD estimates that 40 per cent of Canadians live in housing markets “where house prices are seriously or severely unaffordable.”

It cites data from Demographia showing Vancouver to be the world’s second least affordable housing market, after Hong Kong.

Many Canadian economists have recently taken to disputing this measure of housing affordability. They note that, with interest rates at rock-bottom lows for half a decade at this point, mortgages continue to be affordable, even if nominal house prices are high. But that could change quickly if rates were to rise.

The OECD is urging the government to pull back on government insurance of mortgages. Canada Mortgage and Housing Corp., the government-run insurer, should insure only parts of homebuyers’ mortgages, and should reduce CMHC’s involvement in the market by lowering the limit for how much CMHC can ensure, the OECD said.

To an extent, the CMHC already appears to be reducing its role in the mortgage insurance business, leaving more of the market to private insurers.

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• Montreal: $85,600

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $65,400

  For a condo: $51,300

  Source: RBC

• Edmonton: $85,700

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $75,800

  For a condo:

  Source: RBC

• Nationwide: $92,200

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $81,200

  For a condo: $52,400

  Source: RBC

• Ottawa: $93,500

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $89,300

  For a condo: $60,600

  Source: RBC

• Calgary: $98,300

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $96,700

  For a condo: $57,200

  Source: RBC

• Toronto: $139,400

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $119,800

  For a condo: $73,000

  Source: RBC

• Vancouver: $162,900

  Minimum qualifying income for a standard two-story home.

  For a detached bungalow: $155,100

  For a standard condo: $75,100

  Source: RBC

• NEXT:

  CANADA’S TINIEST HALF-MILLION-DOLLAR HOMES

• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• Toronto: $520,000

  With the number of bedrooms in this house listed as “zero,” it’s pretty clear this former dental clinic in Toronto’s East York is a pretty small house. The realtor boasts of “easy access” to highways (it’s near the Don Valley Parkway) and transit.

• New Westminster, B.C.: $579,000

  The house may only have 726 square feet, but the spacious 60-foot-by-140-foot lot means you can potentially build two new homes on the spot, and that’s pretty much this property’s main selling point.

• Surrey, B.C.: $539,000

  The realtor selling this one doesn’t even pretend the house is good value for money — this house is “lot value only,” is an opportunity for developers or investors to build something new on the land.

• Surrey, B.C.: $539,000

  The realtor selling this one doesn’t even pretend the house is good value for money — this house is “lot value only,” is an opportunity for developers or investors to build something new on the land.

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $519,000

  It may be super narrow, but this house in north Toronto actually has two stories and three bedrooms. It has a walk score of 90, so if avoiding traffic jams is your thing this could actually be something of a decent bargain…

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• Toronto: $430,000

  This house is a little less expensive than the others on this list, but it’s here to illustrate just how little $430,000 will get you in Toronto these days. Two bedrooms in this house, but the realtor says you can still rent out the basement.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• New Westminster, B.C.: $448,000

  Someone managed to squeeze four bedrooms into this little home in the Vancouver suburb of New West, but the realtor still sees building a new home on the spot as a good option.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Toronto: $549,000

  Two bedrooms in this little house but the real value is the land — it has a 110-foot long lot, which on Toronto’s inner east side is a sizable chunk of land.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Victoria, B.C.: $469,900

  Just because a house is tiny and overpriced doesn’t it can’t be colourful and meticulously decorated. Check out this little three-bedroom place in Victoria’s inner city. The realtor boasts that the yard has a “really big organic garden — no GMO seeds or chemicals used in 100 years.” Yes, this must be British Columbia.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Toronto: $499,000

  Would you believe this house has two apartments in it? There’s a three-bedroom unit upstairs and a two-bedroom unit in the basement. With a monthly rental income of around $2,500, you won’t cover the mortgage on it, but an investor could make some money.

• Surrey, B.C.: $539,000

  The realtor on this property doesn’t even pretend the house is godo value for money. This is “lot value only,” and presents an opportunity for investors and developers. Two bedrooms and two baths in the current house on the site.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• Toronto: $549,995

  Two bedrooms and two bathrooms in this house on the city’s east side. There’s also a finished basement.

• NEXT:

  MOST EXPENSIVE HOUSES FOR SALE IN CANADA, FEB. 2014 EDITION

• Newfoundland and Labrador: $1.85 million

  This a href=”http://beta.realtor.ca/propertyDetails.aspx?PropertyId=14085863″ target=”_blank”six-bedroom home in St. John’s/a, constructed over 100 years ago, boasts beautiful original features like beveled glass and “intricate” plaster work, as well as modern additions, such as “spa inspired ensuites with in-floor heated marble,” according to the listing.

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• Newfoundland and Labrador: $1.85 million

• New Brunswick: $2.9 million

  This is actually two finished houses on 235 acres of land near St-Francois, N.B., and it’s definitely one of those properties that look better on the inside than the outside. a href=”http://beta.realtor.ca/propertyDetails.aspx?PropertyId=13978788″ target=”_blank”Vaulted ceilings and fireplaces adorn this building/a, which also boasts long walks in the woods — on the property.

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

• New Brunswick: $2.9 million

The report also said Canada’s energy export boom has heightened regional inequalities.

“Higher oil prices have mostly benefitted residents of Alberta, Saskatchewan, and Newfoundland and Labrador,” the report said.

Meanwhile, those high oil prices are harming the rest of the country. Spending on gasoline, as a share of all retail spending, hit an all-time high in Canada this year, taking significant amounts of money out of the rest of the economy.

The OECD report also said that heavy competition for factory jobs from emerging economies and a high Canadian dollar in recent years have hurt the Ontario and Quebec economies.

Recent unemployment reports have brought home just how extreme this disparity is. Alberta created five times as many jobs as the rest of Canada combined over the past year. Job growth outside Alberta and Saskatchewan was a paltry 0.1 per cent over the past year.

The OECD report said Canada’s payments equalization system — which sends money from rich provinces to poor ones — may need to be reformed in order to keep being an effective way of flattening out regional differences.

The report also called on Canada to implement a carbon tax, but noted the federal government “has no plans” to do so.