Skip to content

Canada’s Biggest Economic Problem Is Our Governments

  

Toronto, Nov. 12, 2026:

Donald Trump didn’t create Canada’s economic problems. He recognized our weaknesses and took advantage of them. Economist Dr. Ian Lee made this point in a recent interview with the Frontier Centre for Public Policy, and the Coalition agrees. Our members have watched these problems build for years. Much of the damage has been done by our own governments, both provincial and federal.

Lee argues that Canada’s premiers have done more economic harm than Trump’s tariffs. That’s a strong statement, but the numbers support it. The International Monetary Fund estimates that our internal trade barriers work like a 9% tariff we’ve placed on ourselves, and that removing them could grow the economy by nearly 7%, or about $210 billion a year. We complain about American trade barriers while keeping our own between provinces, and those barriers weren’t created in Washington. The premiers committed to reaching an agreement on mutual recognition by the end of 2026, and that deadline is now less than two months away. Meanwhile, Ottawa has agreed to let British Columbia collect royalties on Alberta oil that is only passing through the province. It’s hard to see how that helps build one Canadian economy.

The federal government isn’t making things any easier. When trade negotiations with the United States broke down in August, manufacturers were left without answers. What did the Americans demand, what was Canada prepared to offer, and what was rejected and why? We still don’t know. Around the U.S. midterm elections, the Prime Minister said Washington is now “asking less and offering more,” but he hasn’t said which issues remain unresolved or when businesses can expect some certainty. Every day, our members make decisions about employees, purchasing, pricing, contracts and equipment. Those decisions can’t be based on speeches and promises that everything will work out. You can’t run a business on “trust us.”

Budget 2026 adds to the concern. It projects a $62.3 billion deficit this year, $142.1 billion in new spending, and deficits above $50 billion every year through 2030–31. The Parliamentary Budget Officer expects federal borrowing to rise by $732.9 billion over five years. According to the government’s own projections, nearly 13 cents of every federal dollar will go to interest by 2031. That’s money that won’t be available for the roads, ports, power generation and other infrastructure that businesses and communities depend on.

Immigration is part of the same infrastructure problem. The government kept its target of 380,000 permanent residents a year, but it added one-time measures that could push admissions to a record high in 2027. Canada has benefited greatly from people coming here to build better lives, and the Coalition supports immigration. But there’s a practical side to this that governments keep ignoring. People need places to live, along with doctors, hospitals, schools and the infrastructure to support them. You can’t keep increasing demand without increasing capacity, and any business owner understands that. Our infrastructure is already struggling. The Port of Vancouver, our main gateway to Asia, ranks 375th out of 400 ports in the World Bank’s latest performance index. That’s not where a trading nation should be.

Canada has enormous natural resources, skilled workers, established industries and access to one of the largest consumer markets in the world. Yet we keep making it harder and more expensive to do business in our own country.

The Coalition is calling for three changes:

  • First, be transparent on trade: tell Canadians what was offered and rejected in August and where negotiations stand today, especially for autos, steel, aluminum, forestry and other affected industries.
  • Second, eliminate interprovincial trade barriers: the premiers made a commitment, and they should be held to it.
  • Third, get spending under control and fix the basics: stop handing out corporate subsidies while businesses struggle with taxes, regulation and rising costs, approve projects within reasonable timelines, and invest in the roads, ports and energy that let Canadian businesses compete.

Businesses don’t expect governments to solve every problem for them, but we do expect them to stop creating unnecessary ones. We can’t control what happens in Washington, but we can control what happens in Ottawa and the provincial capitals. Canada has everything it needs to be prosperous and competitive. What’s missing is the political will to get out of our own way. Most of this damage is self-inflicted, which means we have the power to fix it. The question is whether our governments are prepared to do what’s necessary.

Scott Hughes

_________________________________________

The CCMBC was formed in 2016 with a mandate to advocate for proactive and innovative policies that are conducive to manufacturing and business retention and safeguarding job growth in Canada. For further information or to arrange an interview, please contact Catherine Swift at swifty4488@outlook.com or 416 816 7248.