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Business investment key to addressing Canada’s productivity crisis

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From the Fraser Institute

By Tegan Hill

The Bank of Canada’s senior deputy governor Carolyn Rogers recently raised the alarm on Canada’s productivity crisis, saying “it’s an emergency—it’s time to break the glass.” But to address Canada’s productivity problem, which is contributing to our stagnant living standards, we must first address Canada’s weak business investment.

For perspective, Canada’s economic growth in the fourth quarter of 2023, as measured by per-person GDP, a common indicator of living standards, was $58,111, which is slightly less than it was at the end of 2014 at $58,162 (after adjusting for inflation). That means that over roughly the last decade, Canadian living standards have not increased. Indeed, our economic problems span well beyond the pandemic. In the five years prior to 2019 (the last pre-COVID year), Canada’s per-person GDP (inflation-adjusted) was the 4th weakest out of 38 advanced countries.

Unfortunately, prospects for the future are dim. According to the OECD, Canada will record the lowest rate of per-person GDP growth among 32 advanced economies over roughly the next 40 years. Countries such as Estonia, South Korea and New Zealand are expected to pass Canada and achieve higher living standards by 2060.

Given that growth in productivity—essentially, the value of economic output per hour of work—is key to higher living standards, it’s no surprise that Rogers and other analysts are raising alarms. But what’s at the heart of our productivity crisis?

Put simply, weak business investment. While the federal and many provincial governments have prioritized immigration and bigger government in an effort to stimulate productivity growth and grow our economy, they’ve ignored business investment, which has significantly declined in recent years.

From 2014 to 2022, inflation-adjusted total business investment (in plants, machinery, equipment and new technologies but excluding residential construction) in Canada declined by C$34 billion. During the same time period, after adjusting for inflation, business investment per worker declined (on average) by 2.3 per cent annually. In contrast, business investment per worker grew (on average) by 2.8 per cent annually from 2000 to 2014.

While business investment has generally declined in Canada since 2014, in other countries, including the United States, it’s continued to grow. As a result, Canada’s GDP per hour worked—a key measure of productivity growth—is among the lowest in the OECD.

Think of it this way; when businesses invest in physical and intellectual capital they equip workers with the tools and technology (e.g. machinery, computer programs, artificial intelligence) to produce more and provide higher quality goods and services, which fuels innovation and higher productivity. Because Canada has lower levels of investment in tools and technology, our workers are less productive.

But here’s the good news. Governments across Canada can enact policies to help stimulate business investment, productivity gains, and ultimately, stronger economic growth. The key is to reduce onerous regulations, rein in high government spending, and create a pro-growth tax environment that makes Canada a more attractive place for business to locate and invest. These policies have a proven track record of improving business investment in Canada. For its part, the Trudeau government can prioritize pro-growth policies when it tables the federal budget next week.

Clearly, without a change in the investment climate and stronger productivity growth, the economic outlook looks grim. Fortunately, Canadian governments can respond to this emergency with pro-growth policy reform.

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Manitoba Must Act Now To Develop Its Northern Ports

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From the Frontier Centre for Public Policy

With U.S. trade risks rising, Manitoba has a fleeting shot to turn Churchill into a year-round Arctic shipping hub. Without bold investment, the North’s economic and strategic promise will slip away.

The window to turn Manitoba’s northern coast into a year-round shipping hub is closing fast

Rising trade tensions with the United States have given Manitoba a rare second chance to develop its northern ports. But if the province doesn’t act decisively, it will miss a historic opportunity to gain a permanent place in global trade—and reinforce Canadian sovereignty.

Manitoba exports billions in agricultural, mineral and manufactured goods to the U.S., so any disruption in that relationship has ripple effects across the province’s economy. Diversifying trade routes isn’t just smart policy: it’s an economic necessity.

Churchill, a small town on the western shore of Hudson Bay in northern Manitoba, is Canada’s only deepwater port connected to the Arctic. Churchill requires regular dredging in an ecologically sensitive area at the mouth of the Churchill River. While most attention has focused on Churchill, its potential will remain limited without serious investment to make it a year-round operation. Right now, it’s only usable during the summer months.

Premier Wab Kinew recently highlighted Churchill as a strategic asset for asserting Canada’s northern sovereignty. That may be true, but symbolic importance alone won’t sustain it. Economic value and operational reliability will. The port’s rail accessibility gives it an advantage if it can handle the volume and meet international trade demands year-round. However, the railway to Churchill is challenged because of unstable permafrost, affecting long-term reliability.

Feiyue Wang, a University of Manitoba professor and Canada Research Chair, sees Churchill as a potential game-changer. As climate predictions see a reduction in sea ice in the Canadian Arctic, shipping lanes that were once blocked for most of the year could become viable trade routes. That’s already happening.

The Arctic Gateway Group has shipped zinc concentrate through Churchill. Alberta Premier Danielle Smith and others have promoted sending oil through it. These aren’t just theoretical opportunities: they’re early evidence of what’s possible. But for Churchill to become a true supply chain hub, it needs infrastructure, investment and long-term political commitment.

Governments have already put money into the port and its rail link. But they must finish the job. That means building the capacity for four-season shipping, attracting private investment, and showing that the port will be viable over time. Manitoba should also press Ottawa to maintain a military presence in the region and use the port to reinforce northern sovereignty.

But if Manitoba is serious about developing northern trade infrastructure, it should also consider a second, ambitious alternative.

The Neestanan utility corridor, an Indigenous-led initiative, proposes a new infrastructure route—rail, roads and energy pipelines—across northern Alberta, Saskatchewan and Manitoba. The corridor would terminate at a year-round, multi-modal port on Hudson Bay, north of the Nelson River. Led by First Nations and Métis communities, Neestanan offers a broader vision for economic reconciliation and northern opportunity. Port Nelson is a deeper water port and its railway line is not in a permafrost zone, making it more feasible for year-round operations.

A century ago, Prime Minister Wilfrid Laurier’s government debated whether Churchill or Port Nelson should serve as the main northern terminal. Ottawa initially backed Port Nelson but later abandoned it due to silt accumulation. Churchill became the chosen site.

Today, both locations deserve a fresh look. With modern engineering, sediment shifts and Indigenous-led proposals, what wasn’t feasible in 1910 may now be not only possible, but necessary.

Churchill was originally built to ship Prairie grain to global markets. But its future lies in more than grain. With the right investment, it could handle a much wider range of goods and help secure Canada’s place in the evolving Arctic economy.

In short, the opportunity lies in developing both ports based on their practical and feasible characteristics, aiming to attract private investment.

This is Manitoba’s moment. But the window of opportunity won’t stay open forever. Other jurisdictions are moving faster. Manitoba must act swiftly—before the opportunity is lost.

This is a revised version of an earlier commentary published here

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Debanking Is Real, And It’s Coming For You

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From the Frontier Centre for Public Policy

By Marco Navarro-Genie

Marco Navarro-Genie warns that debanking is turning into Ottawa’s weapon of choice to silence dissent, and only the provinces can step in to protect Canadians.

Disagree with the establishment and you risk losing your bank account

What looked like a narrow, post-convoy overreach has morphed into something much broader—and far more disturbing. Debanking isn’t a policy misfire. It’s turning into a systemic method of silencing dissent—not just in Canada, but across the Western world.

Across Canada, the U.S. and the U.K., people are being cut off from basic financial services not because they’ve broken any laws, but because they hold views or support causes the establishment disfavors. When I contacted Eva Chipiuk after RBC quietly shut down her account, she confirmed what others had only whispered: this is happening to a lot of people.

This abusive form of financial blacklisting is deep, deliberate and dangerous. In the U.K., Nigel Farage, leader of Reform UK and no stranger to controversy, was debanked under the fig leaf of financial justification. Internal memos later revealed the real reason: he was deemed a reputational risk. Cue the backlash, and by 2025, the bank was forced into a settlement complete with an apology and compensation. But the message had already been sent.

That message didn’t stay confined to Britain. And let’s not pretend it’s just private institutions playing favourites. Even in Alberta—where one might hope for a little more institutional backbone—Tamara Lich was denied an appointment to open an account at ATB Financial. That’s Alberta’s own Crown bank. If you think provincial ownership protects citizens from political interference, think again.

Fortunately, not every institution has lost its nerve. Bow Valley Credit Union, a smaller but principled operation, has taken a clear stance: it won’t debank Albertans over their political views or affiliations. In an era of bureaucratic cowardice, Bow Valley is acting like a credit union should: protective of its members and refreshingly unapologetic about it.

South of the border, things are shifting. On Aug. 7, 2025, U.S. President Donald Trump signed an executive order titled “Guaranteeing Fair Banking for All Americans.” The order prohibits financial institutions from denying service based on political affiliation, religion or other lawful activity. It also instructs U.S. regulators to scrap the squishy concept of “reputational risk”—the bureaucratic smoke screen used to justify debanking—and mandates a review of past decisions. Cases involving ideological bias must now be referred to the Department of Justice.

This isn’t just paperwork. It’s a blunt declaration: access to banking is a civil right. From now on, in the U.S., politically motivated debanking comes with consequences.

Of course, it’s not perfect. Critics were quick to notice that the order conveniently omits platforms like PayPal and other payment processors—companies that have been quietly normalizing debanking for over a decade. These are the folks who love vague “acceptable use” policies and ideological red lines that shift with the political winds. Their absence from the order raises more than a few eyebrows.

And the same goes for another set of financial gatekeepers hiding in plain sight. Credit card networks like Visa, American Express and Mastercard have become powerful, unaccountable referees, denying service to individuals and organizations labelled “controversial” for reasons that often boil down to politics.

If these players aren’t explicitly reined in, banks might play by the new rules while the rest of the financial ecosystem keeps enforcing ideological conformity by other means.

If access to money is a civil right, then that right must be protected across the entire payments system—not just at your local branch.

While the U.S. is attempting to shield its citizens from ideological discrimination, there is a noticeable silence in Canada. Not a word of concern from the government benches—or the opposition. The political class is united, apparently, in its indifference.

If Ottawa won’t act, provinces must. That makes things especially urgent for Alberta and Saskatchewan. These are the provinces where dissent from Ottawa’s policies is most common—and where citizens are most likely to face politically motivated financial retaliation.

But they’re not powerless. Both provinces boast robust credit union systems. Alberta even owns ATB Financial, a Crown bank originally created to protect Albertans from central Canadian interference. But ownership without political will is just branding.

If Alberta and Saskatchewan are serious about defending civil liberties, they should act now. They can legislate protections that prohibit financial blacklisting based on political affiliation or lawful advocacy. They can require due process before any account is frozen. They can strip “reputational risk” from the rulebooks and make it clear to Ottawa: using banks to punish dissenters won’t fly here.

Because once governments—or corporations doing their bidding—can cut off your access to money for holding the wrong opinion, democracy isn’t just threatened.

It’s already broken.

Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author, with Barry Cooper, of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).

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