A Reality Check on Our Productivity Crisis
Canada’s innovation ecosystem feels like a group project where everyone’s working hard, but nobody’s quite sure who’s in charge. We’ve got the brains, the ambition, and a few gold stars on the global stage, but productivity numbers tell a different story.
According to Stats Canada, labour productivity in the business sector dropped by 1.8% in 2023, marking the third consecutive annual decline. Most of the weight falls on Ontario, Quebec, and Alberta, with construction and manufacturing sectors driving much of the downturn. These aren’t just dry numbers: they’re blinking warning lights. And the problem isn’t just about funding or government programs; it’s about how we prioritize, how we lead, and how we adapt.
I believe the path forward starts with asking better questions. The kind that make us uncomfortable. The kind that cut through the noise and get to the root of the issue.
Here are three big questions we need to confront if Canada is going to turn this around.
1. What Have We Done Before That Worked But No Longer Does and What’s Next?
Canada has had some big wins in innovation policy. Programs like IRAP grants have funded groundbreaking research, SR&ED credits have provided breathing room for startups, and our immigration strategy has brought in world-class talent.
But what worked in the past isn’t always a recipe for the future.
Grants might kickstart a project, but do they help it scale? Immigration might bring talent in, but can our housing and social systems support the influx? Are regulatory frameworks keeping pace with the speed of technological change?
We’re still playing the same strategies from a decade ago, even though the game has changed.
I believe it’s time for a candid audit. What programs and strategies are still delivering value? What needs a rethink? And most importantly, what’s next?
2. Who Actually Owns Innovation in Canada?
Here’s the awkward truth. Nobody’s really in charge.
Is it the federal government? Provincial governments? Universities? Industry associations? Private investors? Technically, yes. Practically, no one.
Innovation in Canada feels like a relay race with no finish line. Everyone’s holding a baton, but nobody’s running in the same direction.
When ownership is fragmented, accountability becomes optional.
Who’s measuring outcomes?
Who’s responsible when strategies fail?
Who’s empowered to make hard decisions about priorities and resources?
Right now, innovation strategy in Canada is everyone’s responsibility and nobody’s job. I believe we need clearer lines of accountability, sharper decision-making authority, and most importantly, a sense of ownership over the outcomes we’re chasing.
Innovation thrives under bold leadership, not in a fog of shared responsibility.
3. How Do We Diversify Beyond Big Daddy USA?
Let’s be honest. Canada has a single biggest customer, and it’s our neighbor to the south.
The US isn’t just our largest trading partner; it’s our biggest safety net. But here’s the thing about putting all your eggs in one basket. When that basket wobbles, you panic.
Relying so heavily on one market leaves Canada vulnerable to political whims, trade barriers, and economic cycles we can’t control.
The question isn’t whether we should keep trading with the US. Of course, we should. The question is, why aren’t we better at building relationships elsewhere?
Are we doing enough to engage with Europe and Asia?
Are we actively positioning ourselves in emerging markets?
Are Canadian businesses set up to succeed globally, or just regionally?
If Canada wants to build a resilient innovation ecosystem, we need more customers, more partners, and more global ambition.
It’s Not Just About Policy, It’s About Culture
Underneath all these structural and strategic challenges lies something harder to measure. Canada’s cultural hesitation around risk and failure.
We’re polite, cautious, and practical. These are great qualities for building a stable society but terrible ones for bold innovation.
Failure in Canada isn’t seen as a learning experience. It’s seen as a mark of incompetence. Risk-takers aren’t celebrated. They’re tolerated.
This mindset ripples through everything.
Entrepreneurs optimize for grant requirements instead of customer needs.
Investors hesitate to bet on bold but uncertain ideas.
Regulators move at a cautious, glacial pace while the world sprints ahead.
I believe Canada needs a cultural reset. One where failure is part of progress, risk is rewarded, and ambition isn’t something we apologize for.
The Road Ahead
Canada isn’t short on talent, ideas, or resources. What we’re short on is clarity, leadership, and bold ambition.
The three questions I’ve posed aren’t just rhetorical. They’re calls to action.
- What’s still working, and what needs to change?
- Who owns innovation, and who’s accountable?
- How do we stop being overly dependent on the US and build a global presence?
I believe these aren’t just policy questions. They’re cultural ones.