The silver lining to the US starting a trade war with Canada and regularly threatening annexation is that it has forced this country out of complacency. Indeed, I'm hard pressed to think of a time, at least in my lifetime, when patriotism and nationalism has united so much of Canada.
According to a recent survey by Angus Reid, the percentage of Canadians expressing a "deep emotional attachment" to the country jumped from 49% in December 2024 to 59% in February 2025. And as further evidence of just how unifying this moment in time is, the province with the biggest increase in attachment to country was Québec.
What it means to be a Canadian is sometimes lazily defined according to who or what we are not. But this precarious moment in time is seemingly reminding us who we are. Of course, it also begs the questions: Where do we want to go from here? And do we have the leadership to take us there?
Let's start by looking at some, but of course not all, of the things that we have going for us as a country:
Second-largest country in the world by land mass.
World's longest coastline, with access to both the Pacific and Atlantic Oceans, and increasingly the Arctic Ocean.
Third-largest proven oil reserves in the world (estimated at close to 300 billion barrels), behind Saudi Arabia.
World's largest producer and exporter of potash (which is a key component in fertilizers).
Energy independent and broadly rich in resources (see below diagram).
A fifth of the planet's surface freshwater.
Bilingual country — a quarter of the country reported using French at work in 2011 and, as of 2010, Canada had the 5th largest population of Francophones in the world (behind Morocco).
Multi-cultural country — over 20% of Canadians are foreign-born.
Robust immigration system that attracts top talent from around the world.
Highly-educated workforce with some of the world's best universities — over 60% of Canadian adults have a post-secondary education which is one of the highest rates globally.
Average life expectancy of 82.3 years (2023 data), which is about 5 years higher than that of the US.
Leader in AI, quantum computing, green tech, and space robotics — Canada produces more AI research papers per capita than almost any other country and the Stanford AI Index (2023) ranked Canada 4th behind only the US, China, and the UK.
Here's some of our bounty (via the Financial Times):
And yet, we are not a global superpower.
Worse, we are lagging behind our G7 peers in GDP growth, we are plagued by declining productivity levels, we are not investing enough in new business creation and entrepreneurship, and we have one of the worst affordable housing shortages in the developed world, among other things. We have been complacent for far too long, and a big part of this is because we have, or at least had, the world's largest economy next door demanding our goods.
As of 2024, 61% of all imported oil to the US came from Canada. And US refineries are specifically setup to refine our crude and viscous varietal. This is good for them. They buy our goopy oil at a discount, refine it, and then sell it for a profit. But now the US is clearly saying there's nothing they need or want from Canada. They've also demonstrated through their actions that, under the current administration, they can no longer be trusted as an ally and trading partner. So it behooves us to evolve. It behooves us to take matters into our own hands.
Here are some ideas:
Firstly, Canada should become a republic. For me, this is less about the monarchy being outdated (though it is) and more about the fact that a sovereign superpower like Canada should have its own head of state, and not a foreign King.
Canada needs to increase defense spending and exert much stronger sovereignty over its Arctic lands. For fiscal year 2024-2025, defense spending is projected to reach 1.37% of GDP. This obviously falls short of NATO's 2% target.
Remove red tape and unleash the Canadian economy. Last year, Canada exported more to the US than between its own provinces and territories. Huh? By some estimates, our economy could grow by up to $5,100 per capita simply by eliminating internal trade barriers.
Barriers also need to be removed from the delivery of new housing. Canadians have been over-indexing on housing because of eroding affordability. Our current market environment is an ideal time for market reforms. Here's just one recent post that offers a few concrete suggestions for how to do this.
Grow the Canadian population to 100 million people by 2100. Obviously there are two main ways to do this: We can help Canadians have more babies (more affordable housing certainly assists with this) and we can continue to attract the smartest and most ambitious people from around the world. As of 2022, Canada's fertility rate sat at 1.33, which is below the OECD average of 1.5 births per woman. (The above population target is the focus of a charitable organization called the "Century Initiative.")
Create a sovereign wealth fund akin to what Norway did. Today, Norway has the largest sovereign wealth fund in the world (based on assets under management) and it translates to over US$325,000 per Norwegian citizen and one of the highest GDPs per capita on the planet. Canada also has abundant natural resources as we know. The revenues generated from these resources should (1) accrue to the Canadian population and future generations and (2) steer the global economy toward a more sustainable future.
Invest heavily in new infrastructure. This includes everything from high-speed rail to oil pipelines. In 2020, Canada exported 82% of the crude oil it produced, with most of it going to the US via pipeline from western provinces. If the US no longer wants this, then we ought to find some new customers.
At the same time, we cannot let our abundant natural resources become a curse (see "the paradox of plenty"). We need to be a leader in the new economy. As I've written about before, I find it shocking, for example, that Canada is not stepping up more when it comes to new technologies like crypto. Vitalik Buterin, who is one of the founders of Ethereum and its most prominent figurehead, grew up in Toronto. He went to the University of Waterloo. We should be leveraging this homegrown talent to become a capital of crypto. And this is just one specific example.
Do everything we can to spur more innovation, more risk-taking, and more private investment. It's one thing to have great Universities that publish a lot of research, but ultimately we need to turn this into thriving companies that employ Canadians and generate wealth for Canadians. Here's a post I published in 2023 called, "Canada has an existential productivity problem."
This is obviously not a comprehensive list of all the things that Canada should be doing as a country. And invariably, some or many of you will disagree with some or most of what I have put forward here. But hopefully we can all agree that now, more than ever, we need a strong Canada. We need to start thinking of ourselves as an emerging global superpower.
Cover photo by Juan Rojas on Unsplash
Canada has a lot going for it:
By land mass it is the second-largest country in the world, with the longest coastline. Bookended by the vast Pacific and Atlantic oceans it has enormous trading advantages, alongside access to the largely untapped Arctic to its north. It is a net energy exporter; it has the third-largest proven oil reserves and is the fifth-largest producer of natural gas — but it also boasts large deposits of critical minerals vital to the green energy transition. And, of course, it borders the world’s largest economy.
By purchasing power parity, its economy is ranked 15th globally by size, behind the likes of Turkey, Italy and Mexico. The OECD has forecast Canadian per capita gross domestic product growth up to 2060 to be the lowest among advanced nations.
Poor productivity is at the heart of the country’s growth challenges. In an hour a Canadian worker produces just over 70 per cent of what an American can — that’s below the euro area and even the UK based on 2022 data. Many would have expected the resource-rich economy to benefit as globalisation powered forward, but its relative labour productivity has actually slipped since 2000.
The solution is probably a simple one: We need to innovate, invest more in R&D, and create stronger links between research and Canadian businesses. But executing on this has proven difficult:
Enormous efforts have been made to understand why businesses in Canada invest so much less in R&D than their counterparts in the U.S., much of Western Europe, South Korea and Japan. Is it our reliance on the export of natural resources and agricultural products? Is it reduced incentives to innovate for our heavily regulated and profitable oligopolies in sectors such as banking and telecommunications? Is it our decades-old reliance on incentivizing industrial R&D through federal and provincial tax credits?
It's hard to imagine a more important topic affecting all Canadians. So I would encourage you to read this recent opinion piece by David Naylor (president emeritus of the University of Toronto) and Stephen J. Troops (president of the Canadian Institute for Advanced Research).
It's a balanced piece. Neither of them are arguing for "empty credentialism" or for research that remains in academia. What matters is what we do with the work that our smartest minds are doing. And the overarching point is that innovative research needs to find demand within Canadian businesses.
Right now, we're very bad at this. That needs to change.
Chart: Globe and Mail
We are living through an inflationary hard cost environment. In speaking with one of our cost consultants the other week, he was predicting that overall we could see another 9-10% increase next year here in the Toronto area. Now, who knows what will ultimately happen. But this is top of mind for everyone in the industry and it will continue to impact how and what we build.
One of the challenges with construction -- and this is will documented -- is that unlike the manufacturing industry, which has seen sustained productivity improvements over the years, the construction industry has seen relatively little productivity growth over the last half century. In fact, you could argue that it's been mostly negative in recent history.
The obvious thought is why not just apply what we've been doing in manufacturing to construction. There is, of course, a long standing tradition of trying to do this, with varying degrees of success. But at the end of the day, building a house remains different than building something like a car.
Probably the key difference is that every construction site has unique constraints and conditions and so the process is constantly changing. Whereas the innovations that Henry Ford pioneered were centered around interchangeable parts and a well-defined process that could be repeated millions of times to generate the exact same output.
From what I can tell, there seems to be two ways in which we can think about improving productivity. One, we can try to be more Ford-like and drive standardization. This means more off-site factory construction and more standardization. This is the typical "pre-fab" approach and companies like R-Hauz, as well as many others, are already successfully doing this. The trade-off is less design flexibility.
The second option has to do with better software and hardware. What if we had significantly better "digital twins" for our buildings such that we could see and experience it in 3D before it is physically built? I'm thinking strap on VR goggles and do a walkthrough with the team. This could allow us to pinpoint all of the issues before they actually happen on the job site.
In parallel to this, what if we had far better on-site automation and robotics to then execute on the above digital twin? Think 3D printing concrete instead of using traditional forms. This is all happening and being worked on, but it doesn't seem to be at a point where it is changing our industry. But it is exciting to think that it may one day.