Parliament Hill is viewed below a Canadian flag in Gatineau, Que. (Credit: Sean Kilpatrick/The Canadian Press files)
Trade barriers and tariffs dominate headlines, yet they only hint at the deeper economic challenges Canada faces.
For decades, we’ve struggled with declining productivity, aging infrastructure, and diminishing competitiveness. Nearly two-thirds of Canadians worry we’re on the wrong path and fear future generations will inherit a tougher reality, according to a recent Boston Consulting Group (BCG) cross-Canada survey.
This isn’t merely about trade disputes; it’s about an economy losing momentum. Canada’s gross domestic product per capita has fallen from 92 per cent of the United States level in the 1980s to just 67 per cent today— trailing 47 out of 50 U.S. states. These aren’t abstract numbers; they represent lower wages, higher housing costs and fewer opportunities for millions.
This productivity gap has been well publicized over the past year, but what is less discussed are the reasons for it, such as the chronic underinvestment facing our country, and the actions Canada should take to chart a better course. With Canadians heading to the polls in a month’s time, the urgency to set a path that addresses these challenges has never been greater.
History provides a blueprint for the scale of action we now need. As the Second World War loomed, politician C.D. Howe famously declared a national economic emergency, driving transformative investments such as creating Trans-Canada Air Lines (now Air Canada) and massively expanding energy infrastructure through the interprovincial pipeline.
Howe understood something critical: incremental improvements weren’t enough, just as tit-for-tat tariff discussions won’t be enough to address our current headwinds. Canada required bold, urgent actions to reshape its economic future, and it requires the same decisive action today.
The path forward requires both clarity and ambition. A recent report from BCG’s Centre for Canada’s Future outlines this burning platform for Canada and critical missions for future prosperity.
It is clear that our decline is rooted in chronic underinvestment. Canadian companies invest 3.3 times less in intellectual property and 2.5 times less in machinery and equipment than their U.S. counterparts, limiting our digital readiness, constraining innovation and stunting growth. Since 2000, nearly all labour-hour growth has been in low-productivity sectors such as construction, retail and food service, while high-value industries significantly lag global peers.
Our infrastructure, too, is rapidly aging; energy networks, transit systems and digital grids urgently require renewal. We trail Organization for Economic Co-operation and Development peers two to three times in artificial intelligence adoption despite overwhelming support (83 per cent of Canadians) for more high-value, technology-driven jobs, illustrating challenges with implementing and scaling new technology and innovation.
First, we must aggressively reinvigorate investment, particularly leveraging our immense natural resource wealth. Streamlining regulatory processes, cutting red tape and prioritizing nation-building projects are critical to attracting the capital needed. It’s time to unlock stalled investments, from critical minerals essential to the energy transition to long-overdue natural gas infrastructure, especially considering recent urgent appeals from partners that import energy in Europe and Asia.
Expanding international trade is equally critical. Nearly 80 per cent of Canadians say international success is fundamental to a high quality of life. Diversifying trade with Europe and Asia would shield us from volatility, drive growth and strengthen our global standing.
Canada also has a genuine opportunity to become a global powerhouse in advanced technologies such as AI. With world-class universities, abundant talent and a strong innovation ecosystem, strategic investment here could dramatically boost productivity, increase wages and position us at the forefront of global competitiveness.
However, talent alone is not enough. We must rapidly scale AI adoption across industries, encourage commercialization and create a more agile and interoperable regulatory framework that fosters responsible AI innovation. Without decisive action, we risk falling further behind global leaders who are aggressively integrating AI into their economies.
Revitalizing Canada’s economy demands courage, commitment and ambition, especially from those who control capital decisions. Policymakers must boldly remove regulatory barriers, modernize infrastructure and pursue visionary long-term economic policies.
Senior executives who control capital allocation at our largest resource and energy firms, who steward essential infrastructure, have a particular opportunity to decisively invest in nation-building projects that deliver long-term prosperity.
Yet every Canadian can influence our economic trajectory through daily choices: championing investments in critical infrastructure, resisting regional protectionism, supporting Canadian businesses or pursuing skills needed in advanced industries.
From energy boardrooms in Calgary to the mining and agricultural leaders in Saskatchewan and Manitoba, and to the entrepreneurial hubs in Toronto, Vancouver and Montreal, collective action will transform Canada’s economy and secure our shared future.
Canada’s history proves we are not passive bystanders, but innovators shaping global outcomes. From the discovery of insulin to pioneering AI technology breakthroughs, we’ve consistently punched above our weight. Our abundant resources — natural gas critical to global energy security, minerals essential for green technology and food supplies for feeding global populations — position us uniquely.
Our reputation for fairness, environmental stewardship and innovation doesn’t just give us a right to succeed; it demands we step confidently onto the global stage.
Addressing these urgent economic challenges shouldn’t be partisan. Regardless of the election outcome, the time is now for an unprecedented non-partisan economic task force that spans ideologies to pursue decisive actions that transcend politics. Bold, unified leadership will secure Canada’s prosperity for generations to come.
Kathleen Polsinello is head of Boston Consulting Group Canada, and Terence Smith is senior director of its Centre for Canada’s Future.
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