Economic Strategy

A Core Enabler of Economic Prosperity

In Rebuilding Canada’s Economic Prosperity, I introduced seven enablers that must work together to strengthen productivity, competitiveness, and national capacity. This post focuses on the sixth enabler: Economic Strategy.

Canada’s long-term prosperity depends on how its economic policies enable the country’s industrial and trade ambitions.

These policies shape domestic investment, foreign direct investment, tax competitiveness, infrastructure, innovation, and regulation which influence Canada’s ability to build and scale high value export sectors. When these levers pull in different directions, progress slows. When they align, they become a catalyst for sustained growth.

This alignment also depends on Fiscal Policy and budgeting, which determine how governments allocate resources, structure incentives, and manage risk. Economic Strategy and Fiscal Policy are directly linked and interdependent: Economic Strategy defines the objectives; Fiscal Policy determines whether those objectives can be achieved.

A coherent Economic Strategy provides alignment. Its purpose is to establish a policy framework that strengthens Industrial Strategy and Trade Strategy to create conditions that allow high value, export driven sectors to grow. It also enables other national priorities — including Defence, Education & Skills, and Foreign Talent Recruitment — by ensuring the broader economic environment rewards productive activity. For this reason, Fiscal Policy decisions must be aligned with the goals of Economic Strategy.

Purpose of Economic Strategy

Economic Strategy must reinforce Industrial and Trade strategies. Positioned and executed as an enabler, Economic Strategy — supported by Fiscal Policy — becomes a catalyst for export growth and sector competitiveness. It also creates the policy conditions that enable successful Defence, Education & Skills, and Foreign Talent Recruitment strategies.

Core Economic Policy Areas

To be effective, Economic Strategy must align and coordinate the key economic areas that shape competitiveness:

Domestic Investment: conditions that encourage Canadians and Canadian firms to invest, modernize, and scale.
Foreign Direct Investment: policies that attract global capital, including sovereign wealth funds, pension funds, and institutional investors.
Tax Competitiveness: a tax environment that supports investment, innovation, and global competitiveness — and encourages businesses, entrepreneurs, and employees to contribute to the national strategies Economic Strategy enables.
Infrastructure: infrastructure policy that facilitates industrial expansion and trade performance.
Innovation: systems that accelerate commercialization, technology adoption, and productivity – productivity is an essential element for enabling economic prosperity.
Regulation: regulatory frameworks that enable action, reduce friction, and support sector growth.

A coherent Economic Strategy ensures these areas work together to support high value export growth and the broader national strategies they underpin. Fiscal Policy influences each of these areas, which requires budget decisions to be aligned with them.

Strategic Role of Economic Policy

Economic Strategy must ensure that all economic levers:

support, rather than hinder, the development of globally competitive sectors
reinforce Industrial Strategy and Trade Strategy
enable Defence Strategy, Education & Skills Strategy, and Foreign Talent Recruitment Strategy
create conditions that attract capital, talent, and innovation
strengthen Canada’s long term export capacity
reward productive activity through innovative tax policies at both federal and provincial levels

When these levers are aligned, Economic Strategy becomes a multiplier for national priorities. Fiscal Policy is part of this alignment: budgets must reinforce these objectives rather than dilute them.

Conditions Required for Success

A coherent Economic Strategy depends on several enabling conditions:

Stable, predictable policies that do not suddenly change
Tax measures that attract investment and encourage businesses and workers to support national priorities
Simple, efficient regulations that make it easier for companies to get things done
Infrastructure decisions that support critical industries and trade
An innovation frameword that helps Canadian firms adopt new technology and compete globally
Policies that work together, not pull in different directions
A workforce with the right skills and training, supported by strong education systems and immigration pathways
A financial framework that provides enough capital for companies to grow and scale
Fast, predictable permitting and project‑approval timelines so major projects can move ahead without unnecessary delays
Strong and reliable supply chains, including access to materials, components, and transportation
A competitive marketplace that encourages innovation and prevents excessive concentration
Modern digital infrastructure and strong cybersecurity to support business operations and protect data
Sufficient industrial land, properly zoned and ready for development, so projects aren’t stalled by local bottlenecks
Governments working together across federal, provincial, and municipal levels to avoid conflicting rules and oversight
Efficient trade infrastructure and border processes, including modern customs systems

These conditions create an attractive environment where firms can grow, compete internationally, and invest with confidence. This also requires fiscal discipline that avoids budgeting that undermines the stability businesses rely upon in order to thrive.

Correcting Government Approaches
to Funding, Risk, and Accountability

Federal and provincial governments must change how they approach public spending, risk sharing, and performance reporting. Historically, governments have spent money in hope of results rather than paying for results. Many agreements are weakly structured, allowing companies to litigate successfully and retain taxpayer funds without meeting commitments.

This approach must end. Taxpayer funds and deficit financing should be used only as a last resort. When they are used:

payments must be tied to outcomes, not promises
agreements must be structured so governments do not shoulder the majority of the risk
negotiations should reflect standard business practice, where each party seeks to minimize exposure to financial penalties or losses
governments must publish annual progress reports that track jobs created, revenues generated, exports achieved, and commitments met

Governments should rely on non-monetary incentives such as tax policy, enabling regulations, accelerated approvals, competitive permitting, and predictable investment frameworks. These tools often achieve more than direct spending while avoiding unnecessary fiscal exposure. This shift helps make sure government budgets support competitiveness instead of trying to replace it with spending.

Governments often announce how much they plan to spend and how many jobs they expect to create, but rarely share the other side of the story — how much revenue will come in, how many jobs will appear each year, how much will be exported, or how progress will actually be tracked and reported. This pattern weakens accountability and makes it difficult to evaluate whether a country´s Economic Strategy and public investments are delivering the results announced at the time of the original press event.