By Hessie Jones
Jack Mintz is a President’s fellow school of public policy and one of Canada’s most influential academics when it comes to public policy. At the recent Brampton Board of Trade Energy and Energy and Environment Summit, Mintz spoke about the future of Canada and energy, especially amid current political tensions that has kindled the need for a new national strategy. These uncertain times, according to Mintz, has witnessed the “environmental issue slide off the backburner in this election.”
Caveat, this keynote happened just prior to the Canadian election April 28, 2025, and the implications for the next government are discussed.
There are three factors, according to Mintz that will influence Canada to prosper: 1) Innovation, 2) Urbanization and 3) Energy. On the latter point, Canada has vast amounts of energy resources. Canada’s renewable resources include moving water, wind, biomass, solar, geothermal and ocean energy and in 2022, these sources provided 16.9% of Canada’s total primary energy supply. Moving water is the most important form of renewable energy providing 61.7% of Canada’s electricity generation (2022) and is considered the third largest producer of hydroelectricity worldwide.
Mintz says, Canada has been “Badly Managed”
What’s problematic is Canada’s cumulative GDP growth of 2%, which, since 2015, has fallen behind Organisation for Economic Co-operation and Development (OECD) countries like France (7%) Italy (12%) and the U.S. (15%). According to Stats Canada, “Real GDP per capita has now declined in five of the past six quarters and is currently near levels observed in 2017.” According to Mintz, “Canada is not broken, but instead has been badly managed” as he argues that our comparative advantage is our resource sector, but for some reason with the upcoming election, and in this time of heightened uncertainty, the environmental agenda has receded in priority.
The focus has been redistribution strategies in an economy where the gap in Canadian disposable income between the richest and poorest Canadians has reached a record high: Statistic Canada sites the top 20% of the wealth distribution accounted for more than two-thirds (67.6%) of Canada’s total net worth. Ironically, among G7 nations, Canada has more equitable distribution of income.
Canada’s growth needs capital investment. According to Mintz, Coporate Capital Formation as a share of GDP in Canada (9%) is less than the OECD average (~12%). Canada’s export surplus influences this metric, however, without it, our foreign exchange would experience a steep drop.
Can Canada’s Resource Development Save Our Economy?
According to Mintz, one-sixth of Canada’s economy relies on resources and half of Canada’s non-residential investment. In addition, resource industries have the highest labour productivity than any other industry. Some examples of top exports Mintz cited (2023):
- For crude oil and natural gas, the GDP per working hour = $356.4, representing 18.5% of Canada’s merchandise exports
- Refined petroleum, the GDP per working hour = $840.5, representing 1.8% of our merchandising exports
In fact, since 2021, Canada has experienced double digit growth in exports and imports. However, in 2023, growth was modest with imports growing 1.4% and exports declining by 2.2%.
The largest contributors to merchandise export have been in the parts sector (automotive (17%), aircraft (10.8% and industrial (8.5%) while those most notable sectors driving negative growth included energy (-11.7%), chemical, rubber, plastics (-10.7%).
Mintz pointed out that oil and gas is the most highly taxed industry in Canada, while critical mining is taxed the least. It is important to note that taxation extracts more dollars from the highest performing sectors to subsidize the lesser ones. Despite natural resources’ negative growth, in 2023, it, along with energy being the primary driver, played a crucial role in covering the nation’s bills. Energy resources contributed more than half (61%) of the value of all natural resource assets, followed by mineral resources (24%) and timber (16%). In fact, natural resources also accounted for nearly 50% of Canada’s total merchandise exports, valued at $422 billion.
A recent article from Financial Post recently reported,
“Energy exports are almost two and a half times the value of exported cars, and critical minerals are coming on fast.”
It described Canada as a clear “energy superpower” being the fourth largest global supplier of crude oil and other energy (including refined petroleum, natural gas, nuclear fuel and electricity), more than a quarter of all other exports and 2.4 X more than motor vehicle and parts sector.
On critical minerals, Canada, can effectively compete in a sector that will provide the foundations and infrastructure for clean technology and artificial intelligence. Seven Rare Earth Element Projects (REE) in BC, NWT, QC and Labrador are already forging ahead.
China is known to dominate the global supply chain for rare earths with “61% of global mine production and 92% of REE processing.” China has been able to hone the technology for refining rare earths, which it has been developing for decades. China also produces 94% of the global supply of permanent magnets. However, in Canada, “most of these “REE” deposits host neodymium and praseodymium and terbium and dysprosium — which are needed for the permanent magnets that drive electric vehicle motors and wind turbines and are also vital for many medical and defence applications (fighter jets, missiles and drones).”
The Liberal Plan to Grow Canada’s Economy
At this point in time when heightened concern about Canada’s future is top of mind for most Canadians, how the government responds is critical.
Leading up to the election on April 28th, the Liberal government under Mark Carney proposed a growth plan to inject $150 billion in cash to “catalyze” a $500 billion in investment. This will increase the deficit to $225 billion over four years, which will effectively raise the debt/GDP ratio by 6.8%. The required spending will be $200 billion.
Will the Liberal Environment Agenda Suffice?
The previous axing of the carbon tax is proposed to take on a new form: imposed upon the largest industrial emitters but controlled provincially. There is a commitment to continue to develop electric vehicle infrastructure and influence EV consumption towards zero-emission 2030 objectives. The reliance on oil and gas will need to change in order to reach net zero emissions in this sector by 2050 while building towards global demand for alternative energy sources.
As Mintz points out, these are marginal reforms that may not work, arguing, “Energizing the Canadian economy needs dramatic reforms to encourage more investment and exports and draw more to the trading economy.”
“We need big bang reforms especially in the face of a transitional relationship we now face with the U.S.,” and he points out that tax cuts in tandem with spending cuts would be favourable to government subsidies for “politically chosen investments.”
What does this look like?
Mintz argues that the Canada’s tax system has become overly complex and inefficient, resulting in high economic, compliance, and administrative costs relative to the revenue it generates. “A ‘Big Bang’ tax reform to simplify the tax structure is required while “making the system fairer and more attractive for investment.” Mintz calls for an overhaul of the current tax system which includes making “taxes simpler and flatter, with fewer special credits and deductions, “and “exempting corporate profits that are reinvested in Canada from taxation to encourage businesses to invest and grow domestically.”
He also adds that we need an overhaul of our systems, “Scale back ineffective programs, and eliminate government programs that do not deliver results or exist primarily for political or performative reasons.” Bringing government services into the 21st century is a must as he advocates for “on delivering better, faster public services” by adopting new technologies, and investing in productivity-enhancing capital like artificial intelligence.
In addressing the current trade policies, Mintz criticizes the retaliatory tariffs, stating, “tariff retaliation is usually counterproductive…Much better retaliation would be to isolate the U.S. by lowering or, preferably, eliminating tariffs and non-trade barriers with as many trading partners as we can, thus snubbing our nose at Trump’s neo-mercantilism. If these reforms end up helping us reduce tariffs with the U.S., so much the better.” At the same time, Canada must be mindful of protecting our industry, and to get “freer trade with other partners”, this means adopting more “protectionist strategies like supply management, that the EU, the U.K., Australia, New Zealand and others detest.”
Mintz contends Canada’s economic future depends on bold, comprehensive reforms-especially in tax, government efficiency, and trade.
Leveraging Canada’s resource wealth, simplifying taxes, and opening to global trade will drive investment, productivity, and prosperity. Incremental changes won’t be enough; Canada needs “big bang” reforms to thrive.
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