Imagine running a business where you refuse to fix a leaking roof, throw out tools that could help you do your work, and insist on selling your goods almost exclusively to a single customer—no matter how unpredictable they are. That’s exactly how Canada has been running its economy. Years of bad policy, an archaic tax regime, declining investment, IP that moves to other locations, and barriers to competition have left us struggling to keep up in an increasingly cutthroat global marketplace. The reality is that we operate in a global competition, and competitiveness matters. Now, with new U.S. tariffs looming, our economic vulnerabilities are about to get worse unless we act fast.
The signs of trouble have been flashing for years. Canada’s per capita GDP has dropped in eight of the last nine quarters. Business investment is lagging behind levels from a decade ago. And our productivity has fallen to just 70 percent of U.S. levels, down from 80 percent a quarter-century ago. The problem isn’t that we lack potential—it’s that we haven’t created a country that is attractive for investment or unlocks the potential of its people and resources.
If we want to reclaim our economic strength, we need to stop sabotaging ourselves. Canada must embrace competition, investment, and trade. Here’s how
1. Remove barriers to interprovincial trade and mobility
It makes no sense that it’s often easier for Canadian businesses to trade internationally than across provincial borders. Right now, outdated interprovincial barriers cost our economy $80 billion a year—equivalent to a tariff of over 20 percent on ourselves, and putting a major dent in business investment. The federal government must incentivize a harmonization of rules and regulations, ensuring professional certifications are recognized across provinces, and guaranteeing the free movement of goods, services, and skills. Otherwise, we’re effectively throwing billions in economic potential in the trash instead of using it to drive growth, raise wages, and make Canada a better place to do business.
2. Make Canada a more competitive investment destination
Canada’s tax and regulatory environment is like a giant “keep out” sign for investors. Over the past decade, Canadian investment in the U.S. has grown three times faster than U.S. investment in Canada—meaning we’re sending money and jobs south instead of keeping them here. While Trump makes a lot of noise about the hard goods trade imbalance, the investment trade imbalance runs hard the other way. To reverse this trend, we need to fix our tax and regulatory policies. That means simplifying taxes, ensuring competitive income tax rates, and incentivizing reinvestment and innovation. The federal government can take meaningful immediate action by exempting profits reinvested in capital, machinery, and equipment from taxation. Finally, we need to capture and retain the value of Canada’s intellectual property and maintain leadership roles in data and artificial intelligence before it’s too late.
3. Strengthen and diversify trade relationships
The U.S. will always be a major trading partner, but we need to stop treating them as our only customer—especially when they keep moving the goalposts. Canada has free trade agreements with Europe and the Indo-Pacific, but since these trade agreements were signed, we have done little with them; we’re barely scratching the surface of their potential. By strengthening existing trade deals and pursuing new ones, we can diversify our markets and reduce our vulnerability to U.S. policy swings.
4. Unleash our resource sector
Canada is sitting on an economic goldmine, but instead of capitalizing on it, we’ve been actively blocking it. The world wants Canadian liquefied natural gas (LNG), but thanks to an unworkable policy and investment environment, we’ve barely tapped into that demand. Worst of all, we’ve refused to sell goods to willing buyers—damaging our economy and international relations. Canada has an abundance of food products, and increasingly important critical minerals, that we are not producing and exporting fast enough. Repealing restrictive laws, supporting pipelines, and streamlining project approvals would unlock billions in economic potential and cement Canada’s role as a reliable resource supplier.
5. Improve trade infrastructure to move goods more efficiently
Efficient trade relies on world-class infrastructure. Canada’s ports, rail networks, and highways are essential for moving goods to market, yet delays, inefficiencies, and labour disruptions have weakened our trade capacity. A national strategy focused on long-term investments in trade-related transportation infrastructure—especially port expansions, rail improvements, and steps to eliminate labour disruptions—would ensure Canadian exports reach global markets more quickly and reliably.
6. Repair and strengthen the Canada-U.S. relationship
Notwithstanding the need to diversify trade relationships, it is in Canada’s best interest to develop an even stronger relationship with the United States, while addressing the key sources of irritation. That means increasing defence spending to meet NATO commitments, resolving cross-border migration and drug concerns, reconsidering policies like digital services taxes and supply management, and avoiding antagonistic responses that invite retaliation. Where disputes arise, Canada should negotiate smartly and strategically, rather than engaging in tit-for-tat trade wars that harm our own economy.
A strong Canada requires a competitive, open, and resilient economy. By removing barriers to trade and investment, modernizing our tax system, and strengthening our global relationships, we can ensure that Canada regains its position as an economic powerhouse in the decades to come. Now is the time for bold action. If we fail to act, we risk further decline. But if we embrace competition and trade, we can secure prosperity for generations to come.
See the full Business Council of Alberta policy report here.
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