Jack Mintz: Fix bad policy if Canada wants investment

Prime Minister Mark Carney’s big investment powwow next week is aimed to attract a trillion dollars of private and public investment in Canada over the next five years. However, it is one thing to market our projects — it is another thing for cheques to be written.

That will be Carney’s biggest challenge in the wake of unpredictable events that investors don’t like. He has upped a tariff war with the U.S. that could last another two and half years. With turtle-like economic growth, investments may not pay off compared to other countries. The regulatory process is still subject to political whims.

The dearth in Canadian investment is well illustrated by the table below. The most successful OECD country is Ireland with a GDP per working hour equal to $158 (all values expressed in 2021 international dollars for differences in the cost of living). Corporate investment is 78 per cent of total investment. Households (including self-employed) account for 12 per cent (primarily housing) and public investment’s share is 10 per cent. Overall, Ireland’s corporate investment as share of GDP (averaged from 2021-24) is 18 per cent, highest in the OECD. Corporate investment per working hour is an astounding $28.

Contrast that with Canada. Our GDP per working hour is only two-fifths of Irish levels. While Irish total investment as a share of GDP is like Canada’s (roughly 23 per cent), Canadians prefer to invest in housing rather than businesses (Canada’s corporate share of total investment is 47 per cent, lowest of all OECD countries and the household share is highest at 36 per cent). Corporate investment as a share of GDP is 11.7 per cent, about two-thirds of Irish levels. Corporate investment per working hour is only $7.23, one quarter of Irish levels.

As for other countries, Canada’s corporate investment as a share of GDP is below Sweden, the European Union and Mexico and close to others. We don’t spend as much on investment since we have less income due to our low productivity. When we do invest, we put it in real estate.

Given the lack of domestic capital, the Liberal government seeks financing from international investment and pension funds. Carney’s strategy will use $75 billon in public investment funds like the Canada Strong Fund, Canada Growth Fund and the Canada Infrastructure Bank to “catalyze” private investment with the government subsidizing chosen investment opportunities.

Call this industrial policy on steroids. Some joint public-private ventures will be mixed enterprises with both private and public ownership, which is are used in Europe and Asia. Even the Trump government has joined the fray with US$28 billion invested in 39 deals since early 2025, including with Intel, Lithium Americas and the recent energy deal with North American Blue Energy Partners in Venezuela. Nothing though compares to China with mixed enterprises with at least 10 per cent public ownership representing almost 15 per cent of the stock market’s capitalization of the top 100 Chinese companies.