“A nation that cannot export enough cannot prosper enough.
Industrial strategy is our path to success.”

Why Canada Needs an Industrial Strategy

Part 1 of 5

Canada’s Prosperity Problem

Over the past several decades, Canada’s economic prosperity has quietly weakened. In my earlier posts — Canada Is No Longer Prosperous, Canada´s National Debt and Accumulated Interest, How Federal Debt Impacts Provinces, Territories and Canadians , and Canada’s Current State of Trade – Exports and Imports — I outlined how rising debt, rising interest payments, stagnant productivity, and a persistent trade imbalance have combined to erode our economic prosperity.

These issues show up in the everyday lives of Canadians:

  • higher costs of living
  • fewer secure, well paid jobs
  • growing economic insecurity
  • declining confidence in the future

At the centre of this decline is a simple structural reality: Canada does not export enough. When a country fails to generate sufficient high value exports, it becomes dependent, financially strained, and vulnerable to external shocks.

Reversing this trend requires more than short term fixes. It requires a clear, coordinated national plan — an industrial strategy focused on rebuilding Canada’s capacity to produce and sell high value goods and services to the world.

Please note: this post focuses on Canada’s tradable export economy. A separate post will address the equally important non tradable sectors that support domestic prosperity.

What an Industrial Strategy Actually Is

Industrial strategy is not central planning or government “picking winners.” It is a practical, coordinated national effort to strengthen high value sectors that generate tradable exports — the goods and services Canada can sell internationally.

A modern industrial strategy:

  • strengthens Canada’s ability to export more than it imports
  • identifies key sectors where Canada can compete globally
  • aligns public and private investment
  • removes barriers that slow growth
  • ensures the workforce has the skills needed to support these sectors

Canada’s key tradable export sectors with example companies:

** Parent Companies are Toyota Japan, Honda Japan

These sectors matter because they bring net new income into the country. They create high quality jobs, attract investment, and strengthen the economic foundation that supports public services.

An effective industrial strategy aligns government, industry, education, and talent recruitment toward a shared national goal: expanding Canada’s export capacity.

Why Industrial Strategy Matters for Prosperity

Countries grow wealth by exporting more than they import. Strong export performance expands national income, supports high value industries, and gives governments the fiscal capacity to fund health care, education, infrastructure, and social programs.

When export growth stalls, governments often fill the gap with deficit financing. That works for a while — until it doesn’t. Canada is now at the point where rising interest payments are consuming a growing share of public revenue, leaving less available for essential services Canadians rely on.

Rebuilding Canada’s productive and export capacity is not optional. It is the foundation of long term prosperity.

Canada Has Not Had an Industrial Strategy
Since ~1950

Canada once had a clear national economic vision. In the post war era, the country invested heavily in infrastructure, manufacturing, energy, and resource development. These efforts built the industries that supported decades of prosperity.

But over time, long term planning gave way to fragmented policies, short political cycles, and an increasing reliance on a single trading partner. As a result:

  • Canada lost focus on building globally competitive industries
  • export diversification stalled
  • productivity growth slowed
  • national economic risk increased

This drift wasn’t accidental — it was a failure of governance. Canada’s failure to maintain a coherent industrial strategy since the mid 20th century isn’t just a policy gap — it’s a form of political governance malpractice: a long term neglect of the basic responsibilities required to steward economic prosperity.

This is not a partisan critique. Successive governments, regardless of political stripe, allowed Canada’s long term economic strategy to erode. The result is a country without a coherent plan for export driven growth.

The rapid development and execution of an industrial strategy is how we course correct.

The Four Supporting Strategies

While industrial strategy is the central pillar of this series — it cannot stand alone. A successful national strategy requires four additional pillars that work together as a unified framework. This post is the first in a five part series, and each of the next four posts will examine one of these supporting strategies in depth.

I believe this approach essentially mirrors the approach taken by countries that have successfully implemented industrial strategies — including Japan, South Korea, Germany, Singapore, and Sweden — where long term national planning is supported by coordinated trade, economic, education, and talent strategies.

1. Trade Strategy

Canada needs a trade strategy that identifies high potential markets and focuses on actual trade, not symbolic agreements. The next post will propose targeted, practical trade policy can expand Canada’s export footprint.

2. Economic Strategy

Economic policy must reinforce industrial strategy — not work at cross purposes. A dedicated post will propose how investment, infrastructure, innovation, and regulation can be aligned to support export driven growth.

3. Education Strategy

Canada’s education system must prepare Canadians for the sectors that matter most to our economic future. A full post will explore how universities, colleges, and training programs can be aligned with national priorities.

4. Talent Recruitment Strategy

Canada must attract global expertise that accelerates domestic capacity. A separate post will propose how strategic immigration can be used as an economic tool to strengthen key sectors.

Together, these four strategies form the enabling framework that makes industrial strategy possible.

A Practical, Implementable Path Forward

Canada’s prosperity is not guaranteed. It must be built — intentionally, strategically, and with a clear national purpose.

A modern industrial strategy gives Canada a practical, measurable, and implementable path to rebuild its productive capacity, strengthen its export performance, and restore long term prosperity.

Some encouraging news. In its 2025 Federal Budget the Carney government signaled the need for an Industrial Strategy.

In Part 2, I will propose the trade strategy Canada needs to support this industrial vision — and explain why focusing on real trade, not symbolic agreements, is essential to our economic future.

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