For a chance at the American dream, look to the U.S.' northern neighbor, Ford Foundation President Darren Walker told CNBC on Friday.

"That American dream as we know it, which was the envy of the world, is no longer the envy of the world," Walker said on "Squawk Box." "In fact, the United States has fallen behind other industrialized nations in terms of economic mobility. If you want the American dream today, you ought to move to Canada."

Walker oversees the international philanthropic organization that was founded by Henry Ford's son, Edsel, in 1936. The Ford Foundation, with a focus on social justice, has an endowment of $13 billion and distributes $600 million annually in grants.

Walker said he doesn't believe that capitalism is fundamentally broken. He said he wants it to return to a form in which it provides "shared prosperity," like it did for him and for his grandfather.

"But the challenge today, that mobility escalator that I got on, that probably most of you got on, has stopped," said Walker, who added he was the first in his family to go to college.

The escalator is still moving in Canada, Walker contended.

"They've got a capitalist system, and they're doing better than us on providing opportunity," Walker said. "I want to challenge capitalism to do what it's supposed to do, and that is to provide opportunity for as many people."

For that to happen — and ultimately, for the American dream to be restored — Walker said new waves of public policy must be implemented.

"The relationship in a democratic capitalist system is always one of the relationship between public policy and the markets," Walker said, contending "we do have to talk about tax policy ... at the end of the day, opportunity isn't enough if we have a system where there is a bias, where there is discrimination."

For example, Walker said the state of public schools in the U.S. and the criminal justice system, which "ensnares too many people of color," make it harder today to get on the mobility escalator.

At the same time, he said also corporate practices of yesteryear that helped even the economic playing field, such as profit-sharing, have faded.

"My grandfather had a third-grade education. He worked as a porter for an oil company down in Texas where I'm from," Walker said. "When he retired, because of the profit-sharing program of that company, he retired with enough stock to live a life of dignity. Today, those programs don't exist anymore."

The result of today's public and corporate policies is stark economic inequality, he said.

"Every generation has a challenge, and the challenge of our generation is inequality," Walker said. "If we continue to have the levels of inequality that we have in this country, it's going to be harmful for our long-term democratic interests."