The need for a modern Canadian Industrial Policy

by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East It is generally accepted today, that a modern industrial policy is crucial for nations aiming to foster economic growth, innovation, and competitiveness in the current global economy. Unfortunately, Canada at this point does not have a new C.D.Howe and the prospect of getting one in the near future is rather bleak. Considering the geopolitical situation in the world and associated ever changing and evolving factors, Canada needs to craft a modern, proactive and robust industrial strategy across key sectors vital to Canadian national interest. Canada's current approach, which provides resources and funding on an ad-hoc basis to politically correct projects and/or in reaction to global crises, without a real analysis of opportunities, is profoundly inefficient and costly. While we may not be able to match the financial strength of the United States, China, or the European Union, we can leverage, maintain and increase our competitive advantages in research and development, talent, and intelligent exploitation of our vast natural resources. Positioned geographically and economically for future success, Canada must concentrate on prioritizing and refining its industrial policy to stay competitive globally. Rather than acting on ivory tower impulses hosted by Ottawa, Canada should support industries and people in sectors critical to our economic and national interests. Forward thinking policies anchored in knowledge and understanding that will coordinate domestic and foreign investment within a new pan-Canadian economic strategy is essential for economic growth in all of Canada’s regions. Canada's economic landscape has traditionally been influenced by its key industries such as natural resources and technology. A well-crafted industrial policy must provide targeted support to these sectors. It must include high tech manufacturing, boosting productivity and global competitiveness. A new approach to, and significant investment in, research and development (R&D) is sorely needed. It is crucial for Canada to ramp up its R&D spending to drive innovation, something that has been grossly neglected in the last quarter of a century. Canada used to be a leader in the nuclear industry, but has lost its edge due to a short-sighted, mostly ignorant political class, advised by an incompetent and politically polluted public service. Strategic diversification of Canada's economy, particularly through the development of emerging industries like artificial intelligence, renewable energy, and advanced manufacturing, can pave the way to a more resilient economy. For this to happen there has to be a real political will and a knowledge-based political class. Do you know of any likely candidates waiting in the wings? The political class in power, as well as those seeking power, bombard us with casual and aimless documents that do more harm to Canada’s global standing than not producing any documents at all. Instead, we need visionary industrial policies and national plans that include concrete implementation strategies. It is necessary for Canada to invest in its critical infrastructure, improve education and skills training, and foster a business environment conducive to innovation and entrepreneurship. Our elected officials must cease and desist from committing valuable financial resources to pet political projects, which do not serve the interest of Canadians. Canada really needs to concentrate on a new approach to its economy in order to get its strategic industries under more stable state control; that puts ownership and control in the hands of the people, and is not subject to the avarice and will of the multinationals. There is a need to be more accountable to the people of Canada and stop wasting precious taxpayers’ money on uncontrollable foreign projects where no one is held accountable. In addition, Canada must develop policies to secure its supply chains, particularly for essential goods such as medical supplies, semiconductors, and critical minerals. By building domestic capabilities and diversifying supply sources, Canada can enhance its economic sovereignty and reduce reliance on foreign entities. A well-crafted industrial policy can also drive job creation and promote social well-being. By focusing on national interest driven high-growth sectors and investing more in technical education and training programs, Canada can ensure its workforce is equipped with the skills needed for the jobs of the future. This will reduce unemployment and also address income inequality by providing opportunities for upward mobility. A modern and well thought-out national industrial policy can help address geographic inequities in Canada by encouraging population growth and job creation outside of a handful of major cities and eventually creating new settlements in this great country currently populated far from its valuable natural resources. Certainly, a new, modern national industrial policy needs to work closely with a new and innovative tax policy necessary to generate funds for further economic development. Unfortunately, the current tax policy is oriented only to taking money in order to raise the numbers of an increasingly inefficient public service. It is definitely not being spent in the area of science and innovation, which should be a vital priority. With such enthusiasm for tax hikes, it is not surprising that since the Trudeau government took office in 2015, the number of employees at the Canada Revenue Agency has increased from around 40,000 to almost 60,000 by 2023. Compare this growth of almost 50 per cent in the public service, to the growth rate of private-sector employment, which was about 11 per cent between 2015 and 2023. Moreover, that 11 per cent is the combined growth for private industry employed and self-employed individuals. Furthermore, as taxes are raised, public safety and national defence, which are key federal government functions, are performed dismally. Crime is rising and Canada’s military readiness is “dangerously inefficient.” Canada is a rich country and I think it would be a good idea to spend this money on hiring less bureaucrats and more scientists and engineers. In conclusion, Canada must develop a comprehensive new and modern industrial policy combined with an efficient tax policy. This is essential for Canada to navigate the complexities of the modern global economy and secure a bright future for the next generation. What do you think?