Reimagining Canada’s Economy: A Bold Path Forward

By Burgess Langshaw Power and Maral Niazi
Originally published on Policy Options
September 29, 2025

In a world defined by volatility and uncertainty, Canada stands at a crucial crossroads. For too long, the country has operated as a resource-rich exporter rather than an innovator fueled by technological advancements. Recent global upheavals—from geopolitical tensions to supply chain disruptions—have underscored Canada’s economic vulnerabilities. However, these challenges also present an unprecedented opportunity to recalibrate our approach and secure a resilient, productive, and competitive economy.

The Need for a Cohesive Economic Strategy

Canada’s traditional economic model has primarily relied on exporting raw materials, with little emphasis on value-added innovation. This risk-averse and fragmented investment strategy has hindered its potential to ascend the global value chain. As we face a future defined by increasing demand for clean energy and advanced technological solutions, it is imperative for Canada to pivot toward a more targeted, mission-oriented economic strategy.

This new approach should encompass sectors where Canada holds competitive advantages—namely, agriculture, forestry, energy, and critical minerals. These sectors are not siloed; they represent a synergistic ecosystem that, when unified, can enhance our economic resilience.

For example, integrating critical minerals with AI technologies can optimize agricultural productivity. Similarly, advancements in sustainable forestry can facilitate the construction of energy-efficient infrastructures, supported by a highly skilled Canadian workforce. This interconnected strategy can amplify return on investment while fostering technological sovereignty and intellectual property development.

Learning from Global Models

To transition effectively, it is essential for the federal government to scrutinize the shortcomings of its current strategy, drawing lessons from successful international models. Numerous initiatives such as carbon pricing and clean tech incentives have fallen short due to their lack of focus and rigorous evaluation. In contrast, countries like Saudi Arabia have demonstrated the power of concentrated investments by announcing substantial funds, such as a US$10 billion AI venture fund.

This “scattershot” approach in Canada—distributing limited funds across multiple initiatives—has contributed to our stagnation in technological leadership. Focused investments in high-potential areas can generate economies of scale, foster deeper knowledge accumulation, and spur breakthrough innovations.

The Triad of Environment, Economy, and Technology

An evolution in our mantra is necessary: instead of solely aligning environment and economy, technology must be recognized as the third pillar driving sustainable growth. Canada’s future depends on strategically deploying transformative technologies that enhance productivity, while concurrently addressing pressing climate imperatives.

Sector-Specific Opportunities

1. Agriculture
   Contributing approximately 7% of Canada’s annual GDP, the agriculture sector has historically focused on raw commodity exports—an approach that limits its growth potential. Initiatives such as Protein Industries Canada illustrate the sector’s untapped possibilities, positioning Canada as a leader in plant-based proteins through advanced seed genetics and processing technologies. Yet Canada lags behind the U.S. and EU in agri-tech funding, risking its competitive edge.

2. Forestry
   The forestry sector, an established pillar of Canada’s natural-resource economy, faces challenges from climate change and fluctuating markets. Past efforts to enhance sustainability have yielded token results. Instead, Canada should prioritise innovative solutions like next-generation mass timber products for sustainable construction to tackle both the housing crisis and emissions issues. Advancements in drone-assisted reforestation could also position the sector for global leadership.

3. Energy
   Although Canada has missed out on opportunities in wind and solar manufacturing, it retains advantages in emerging energy technologies. The country’s abundant hydroelectric power can serve the growing AI-driven energy market, particularly as data requirements soar. Investing in next-generation geothermal technologies, medical isotopes through CANDU reactors, and small modular reactors could position Canada as a leader in this sector.

4. Critical Minerals
   With vast reserves of essential minerals like lithium, cobalt, and rare earth elements, Canada is poised to become a significant player in AI hardware and clean tech. The federal government’s critical minerals strategy emphasizes domestic refining and manufacturing, promoting sovereignty amidst global instability. Collaborating meaningfully with Indigenous communities will ensure that local populations benefit from these economic opportunities.

Conclusion

Canada’s reluctance to “pick winners” through decisive focused investments has perpetuated its economic stagnation. Empirical evidence indicates that targeted allocation of resources outperforms broad spending in enhancing productivity and competitiveness.

To transform its economic landscape, Canada’s federal government must embrace a “mission government” framework. This strategy should align with national priorities, focusing on sectors such as agriculture, forestry, energy, and critical minerals. Decisive actions taken now can propel Canada forward, transforming it into a leader in cutting-edge technologies.

Recommendations

1. Adopt a mission-oriented strategy targeting agriculture, forestry, energy, and critical minerals with strategic annual investments toward net-zero goals.
2. Enhance existing economic sectors with focused funding for AI integration and intellectual property development.
3. Partner with provinces, municipalities, and Indigenous Peoples for inclusive projects that support social benefits and public trust.

This reimagined economic strategy will drive prosperity, unity, and sustainability for Canada—ensuring resilience for the future in an increasingly uncertain world.

This article originally appeared on Policy Options and is published here under a Creative Commons license.