Lawrence Zhang

While Trump’s tariffs pose an unprecedented threat to Canada’s economy, they should serve as a wake-up call. Canadian policymakers must seize this moment to enact bold reforms that drive innovation, boost productivity, and strengthen global competitiveness.

Instead of viewing foreign tech companies as competitors to domestic innovation, Canada must embrace their complementary role in fostering a vibrant, interconnected tech ecosystem.

Canadian consumers should not have to bear the costs of the Online Streaming Act. If the creation and promotion of Canadian content is a societal goal, then it should be funded by the government.

Big Canadian telcos, grocery stores, and banks have not seen major changes in profitability over the past four years or compared to their international peers. Rising prices should not be attributed to “price gouging” but plain old inflation.

Age assurances are not the only available option to protect children online. But if policymakers are set on mandating age assurance systems, regulation should be limited to high-risk circumstances, avoid inflexible requirements, and be designed to be technologically and commercially agnostic.

Innovation, productivity, and competitiveness must be top priorities for Canada’s next federal government, not sidenotes or vague aspirations to be addressed with little more than lip service.

Legislated procurement targets for SMEs should be a tool to stimulate technology R&D and commercialize Canadian innovations, and not a goal in and of itself. Focusing on firms that develop innovative solutions for government problems will create opportunities for Canadian firms to scale up and drive innovation, productivity, and competitiveness.

Canada should drop its Digital Services Tax, which will harm Canadian businesses, startups, and consumers and surely lead to a retaliatory response by the U.S. government.

Canada is capturing less than half of its technological potential, allowing for groundbreaking research and innovations to sit unused or to be scooped up by foreign companies.

The artificial intelligence market in Canada is still in its early stages but is growing rapidly and becoming increasingly competitive. At this juncture, there is no clear evidence of market failure, substantial barriers to entry, or exclusionary practices that would necessitate intervention.

Canada faces unprecedented challenges in innovation, productivity, and competitiveness. The first step in addressing them is to develop a clear understanding of the Canadian economy’s underlying structure and performance in each area. Policymakers must then tailor strategies for specific industries and technologies instead of focusing on principally on macro factors.

The word “innovation” appears a total of 97 times and “productivity” 63 times in Canada’s 2024 federal budget, and many measures targeted towards innovation and productivity reflect that focus. However, some of the funds being disbursed are tangential at best to actually addressing Canada’s declining productivity and supporting Canada’s innovation ecosystem.

Watch now for an engaging discussion with leading international experts and peers presented by ITIF’s Centre for Canadian Innovation and Competitiveness.

Watch now for ITIF's launch event for the Centre for Canadian Innovation and Competitiveness, an Ottawa-based ITIF affiliate focused on tackling these issues. The event featured an expert panel discussion on a new report from the Centre examining the how and why of Canada’s performance on key measures of productivity, innovation, and competitiveness.