As published in The Globe and Mail, an English-only outlet.

This week marks a concrete step in Canada’s relationship with Mexico. Federal minister Dominic LeBlanc, Canada’s lead representative on Canada–U.S. trade, will head the largest Team Canada Trade Mission in history to Mexico City, bringing together several hundred Canadian business leaders and officials.

This follows the Canada-Mexico Action Plan, an ambitious three-year collaboration launched last September by Mexican President Claudia Sheinbaum and Prime Minister Mark Carney, which aims to unlock the untapped potential of their bilateral relationship, including in strategic sectors such as technology, energy, critical minerals and agriculture.

We must make sure that these initiatives are backed up with action. Investing more in its relationship with Mexico isn’t just good diplomacy for Canada. It’s smart strategy.

Although we often hear of Mexico as Canada’s third-largest trading partner, it only accounts for 1.1% of our exports, or 3.6% of our two-way trade.

That’s a striking figure considering that we’ve been partner countries in a continental free-trade agreement for more than 30 years — first through NAFTA and now the United States-Mexico-Canada Agreement, also referred to as CUSMA — and that we’re relatively close geographically. In fact, Export Development Canada views our trade potential with Mexico as significant and underutilized. So why haven’t we traded more?

Trade experts will point out that, until recently, Canada simply didn’t need to. We have a behemoth market next door where the language is the same, the culture is familiar, and the business climate has been predictable. But that calculation no longer holds. U.S. President Donald Trump has imposed tariffs on Canada and threatened more and called the continental trade agreement “irrelevant.”

The benefits of CUSMA far outweigh its irritants, and for North America to thrive, the agreement must be preserved when it comes up for review on July 1.

But preserving the agreement cannot be Canada’s only plan. Hope isn’t a strategy, and there are forces well beyond our control when it comes to CUSMA’s future. That’s why taking immediate steps to diversify our trade relationships is imperative for Canada’s long-term growth, and even its sovereignty.

If Canada succeeds in meeting Mr. Carney’s goal of doubling non-U.S. exports within the next decade, we will be far better positioned to withstand American political and economic pressure. That resilience matters.

Turning trade diversification from rhetoric into reality, however, won’t be easy. As Ottawa moves from campaign promises and global speeches toward an actual trade diversification strategy, Canadian businesses, whether they already export or aspire to, will need to decide where to go and how to get there.

For small- and medium-sized enterprises, many of which have never seriously considered markets beyond the U.S., the challenge will be particularly acute. Yet with SMEs accounting for 98% of Canadian businesses, bringing them along is essential.

Mexico offers an obvious and underused opportunity. With a population of 133 million, a growing middle class, similar time zones, and a clear openness to deeper collaboration with Canada, it checks many of the boxes. We also benefit from existing geographic and supply-chain connections by rail, road and ports to build upon.

Beyond CUSMA, both countries are also signatories to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, creating multiple free-trade pathways that remain surprisingly underutilized. Over the longer term, deeper engagement with Mexico could also serve as a gateway to other promising Latin American markets.

In a serious moment of nation-building, Canadian government officials and business leaders alike have a responsibility to ensure that trade diversification efforts are not performative. That means creating the conditions for sustained, long-term growth and paying particular attention to SMEs on both sides that will need early support to identify opportunities and act on them.

Strengthening ties with Mexico isn’t only about diversification. It’s also about leverage. With the prospect of an “annual review” scenario for CUSMA — where the agreement remains in force but faces yearly scrutiny through 2036 — uncertainty could further entrench as our new normal. In that environment, Canada would be far better served by a deeper, more resilient partnership with the other party at the table.

When considering whether Canada should invest time and effort in renewing CUSMA or instead focus on greater trade diversification, the reality is that Canada can — and should — do both, in partnership with Mexico.

Catherine Fortin LeFaivre, Senior Vice President, International Policy and Global Partnerships, Canadian Chamber of Commerce

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Read “Policy Matters: It’s the Year of the USMCA Review. What Does This Mean for Canada?” for more on this topic.

As published in the Hill Times, an English-only outlet.

Despite an endless slew of headlines caused by the United States administration’s drastic trade policy course changes over the past 12 months, one executive order from last May has largely flown under the radar. The White House has proposed benchmarking domestic drug prices to those of other developed countries to balance differences between U.S. and international drug prices, a move dubbed the “most-favoured-lowest price.” This proposal was repeated in recent a White House fact sheet and during a roundtable with American health executives.

The proposal may have flown under the radar, but its repercussions won’t. Canada’s pharmaceutical supply chain could be significantly disrupted, and it would be exponentially more difficult to attract pharmaceutical investment in Canada.

Contrary to most high-income countries that regulate drug prices, the U.S. largely leaves drug pricing up to market forces. As a result, list prices for brand-name medicines are significantly higher in the U.S. when compared to peer countries like Canada, regularly averaging four to five times the price.

The regulation of drug prices elsewhere is a long-standing trade policy irritant for the U.S. as it argues this asymmetry unfairly burdens Americans with the funding of global pharmaceutical innovation. Despite accounting for 38% of the GDP of high-income OECD countries, the U.S. accounts for 60% of spending on innovative medicines. On a per capita basis, the U.S. ranks far above most peer countries, spending 0.78% of GDP per capita on innovative medicines, compared to just 0.34% in the European Union and 0.32% in Canada.

The most-favoured-lowest price theoretically rectifies the spending imbalance by pressuring foreign governments to increase their drug prices, thus allowing drug manufacturers to lower their prices in the U.S. market without taking major losses.

Canada, with our relatively low per capita spending on pharmaceuticals, is a natural target, but formulating an appropriate response to the U.S. policy is far from straightforward. To start, this issue will be addressed in the context of our broader trade negotiations with our largest trade partner. Resisting U.S. demands here could result in consequences elsewhere, and vice-versa. We can therefore expect this issue to be included in the negotiations for the renewal of the Canada-U.S.-Mexico Agreement.

Changing our own drug system to better encourage investment and innovation is not an easy task. It is not well understood that our underfunding of pharmaceutical innovation has real and negative consequences for Canadians in the form of less choice and longer wait times for new medicines. Currently, Canadian patients on public plans wait more than two years on average to access new and potentially life-saving treatments — some of the longest wait times in the developed world—whereas patients in France and Germany wait less than a month. There is an opportunity to bolster funding for patient access to pharmaceuticals, while simultaneously addressing U.S. concerns for more balance. This parallels the U.S. push for so-called rebalancing around NATO, trade, and many other policy areas. 

The executive order notes that any policy or practice judged discriminatory against U.S. interests, or that forces them to pay a disproportionate amount for global pharmaceutical innovation, could fall under the magnifying lens. Beyond pure price regulation, this could encompass research and development funding, intellectual property (IP) protections, and the speed with which regulators and public insurance plans approve new drugs and make them available to patients.

These are areas where Canada has known shortcomings and where broad consensus can be achieved, avoiding endless and divisive debates. Aligning Canadian IP rules with the U.S. and EU, creating a fund for new medicines, and improving the notoriously long timelines for approving new medicines and making them available to patients on public plans would effectively increase our funding of pharmaceutical innovation and respond to U.S. concerns.

Canada’s health system and innovative medicines sector are symbols of national identity and pride that we need to maintain and strengthen — but Canada could benefit from self-reflection on a question of encouraging more investment and innovation domestically. Though difficult questions may arise from the exercise, we should focus on how to make gains in our own economic imperatives in this trade war without jeopardizing pharmaceutical supply chains and patient access.

Liam MacDonald, Director, Policy and Government Relations, Canadian Chamber of Commerce

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Visit the Life Sciences Council to learn more about the Canadian Chamber’s advocacy.

In this Policy Matters, we’ll try and answer some of the big questions we, and others, have been asking about AI.

How are Canadian companies using AI?

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AI is changing how businesses work. Of the Canadian businesses reporting AI use in the last year, the top changes made after adoption were developing new workflows (40%), training current staff to use AI (39%), and purchasing cloud services or cloud storage (26%).

Professional services, finance and insurance, information and culture, and health and social assistance are Canada’s major AI adopters. Between Q2 2024–Q2 2025, each of these four sectors increased their AI adoption by over 10%, some even as much as 15–20%. How are businesses in these sectors using AI?

• Professional services: data analytics (44% of businesses); speech or voice recognition and machine learning (32%).
• Finance and insurance: data analytics (41%); speech or voice recognition (35%); and machine learning (31%).
• Information and culture: virtual agents or chat bots (41%); machine learning (36%); natural language processing (35%).
• Health and social assistance: suggestion systems (24%); virtual agents or chat bots (21%); neural networks and machine learning (17%).

Is AI taking Canadian jobs?

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According to an Abacus Data survey in 2025, 47% of Canadians were somewhat or very concerned that AI and automation would take over their job or force them to change their job/career in five years. Similarly, 70% of Canadians felt that AI would likely make some jobs in their industry obsolete.

So far, our data shows that AI adoption up does not necessarily equal jobs down. There’s no one-to-one ratio. According to the BDL’s Q4 2025 Business Insights Quarterly, only 6% of Canadian businesses using AI have decreased total employment. Most (89%) have not changed employment.

In industries with rising AI adoption, there were job gains and losses. For example, since Q2 2024, the finance and insurance sector increased their AI adoption by over 20% and their job growth by around 8%. On the other hand, the mining, oil and gas sector increased their AI adoption by less than 5% but employment growth decreased by over 8%. Youth employment — another concern given Canada’s youth unemployment rate of 12.8% (November 2025) — has also been holding up in high AI adoption industries.

Why is Canada behind in AI adoption?

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Despite the four sectors leading in AI adoption, Canada overall is lagging. In 2025, roughly 12–14% of businesses were using AI or planning to use AI. BDL projects adoption to reach 17–18% this year — still far short of where we need to be if we’re to keep pace with global peers.

In 2024, BDL put forward two adoption scenarios in the report Prompting Productivity: Generative AI Adoption by Canadian Businesses. BDL predicted that Canada would reach an AI adoption tipping point of 50% between 2027 (fast adoption scenario) and 2030 (slow adoption scenario). Projections for 2026 AI adoption align with the slow adoption scenario.  

How can we encourage AI adoption in the private sector?

First the question: Why do Canadian businesses need to adopt AI?

AI can help address one of the greatest economic threats to Canadian prosperity and living standards: low productivity. Productivity is closely linked to a country’s prosperity and long-term standard of living (measured by GDP per capita). By making work more productive, AI could prompt productivity gains for Canada by accelerating and automating workers’ low-value and labourious tasks at little cost, allowing them to focus their time on higher-value activities.

And now, the areas to focus on to encourage adoption in the private sector:

→ Regulation

It’s critical that Canada’s approach to regulating AI creates a favourable environment in which businesses can thrive and contribute to Canada’s economic success. We cannot add red tape that will stifle innovation and undermine private sector investment.

One of our recommendations in the 2025 B7 Communiqué that we developed with our counterparts was to strike a balance between regulation and innovation. Developing more pro-innovation policy frameworks will ensure that technological advancements can thrive, at the same time ensuring the responsible development and use of AI to protect national and personal privacy and security.

→ Investment

In 2024, a third of Canadian businesses reported access to finance as a challenge preventing the adoption of new technology.

Providing targeted financial incentives, establishing sector-specific AI centres of excellence to support SMEs, promoting access to cloud infrastructure, and fostering collaboration between technology providers, industry stakeholders, and academia would help increase adoption.

→ Workforce

In BDL’s Prompting Productivity report, Canadian businesses cited hiring skilled employees (35%) and retraining employees with new tech skills (28%) as challenges to adopting new technologies. To enable widespread and responsible AI adoption, Canada should expand AI-related education, workforce upskilling, and talent pipeline development to address these challenges.

In the B7 Communiqué, there are several recommendations for B7 governments to help with preparing the workforce.

• Partner with industry, academia and polytechnics to encourage broad-based AI and digital education by developing certificates and skills programs in addition to graduate and postgraduate programs in AI.
• Support industry to upskill/reskill workers by providing targeted funding and resources for organizations that support workers to develop AI-relevant digital skills across sectors

→ Infrastructure

In our B7 Ministerial on Industry, Digital and Technology, one of the panellists described Canada as being in a privileged position because we have the compute, talent and innovators that are necessary for AI leadership.

At the same event, panellists warned that there’s a danger in throwing money at unnecessary infrastructure. Standing data centres at the size and scale needed for general purpose data sets is hugely expensive; they should set up centres only for what is critical, like protected data sets that must remain sovereign. Governments should instead help facilitate demand by ensuring access to compute for researchers who want to work in the country, provide incentives for the local business community to encourage adoption, and expand the capacity of compute infrastructure providers in Canada to incentivize increases in the supply and availability of compute within Canada.

What is compute? According to Innovation, Science and Economic Development Canada, “AI compute refers to the computational resources required for AI systems to perform tasks, such as processing data, running algorithms and training machine learning models. In other words, AI compute is the technology that powers AI.”

→ Public Buy-In

Trust is important for technology adoption. Public interest and acceptance of AI tend to be positively correlated with a country’s business adoption rates, but global IPSOS surveys reveal that Canadians are less knowledgeable and more nervous about AI than citizens of most other countries. Getting Canadians to trust AI will be a big step in increasing overall adoption rates.

What is the Canadian Chamber working on?

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• Visit our Future of AI Council page for more on our AI advocacy.
• Read the 2025 B7 Communiqué for our recommendations to G7 governments.
• Register for The Case for Canada: Making AI Count, BDL’s data conference on March 26.

As published in the Saskatoon StarPhoenix, an English-only outlet.

Growing up on the family farm, geopolitics didn’t feature very prominently when listening to my dad talk about the business. His choice to plant a certain crop was made on its merits — soil conditions, rotations, weather, and paying the bills — not on global trade storms.

Farmers today don’t have geopolitics-free decisions.

During a recent family talk, my father told me, “I grow canola to sell and feed people, not to be used as leverage in politics.” And he’s right to feel that way.

That’s why the Canada–China agreement was so personal for farmers and producers across agricultural communities and coastal seafood sectors. It wasn’t far away or abstract. It was a weight, borne on behalf of an entire country, being lifted off people’s chests. Though time and gains were lost, the news offered hope that years of uncertainty might finally give way to an iota of stability.

Our natural Canadian humility may want to kick in here, telling us to assume meager gains from this deal for our modest, middle-power sector. That would be a mistake. Canada’s agricultural sector is a powerhouse. Agriculture and agri-food account for one in nine Canadian jobs and roughly seven per cent of GDP. That’s nothing to be bashful about.

In 2023, Canada ranked as the world’s fifth-largest exporter of agri-food and seafood products. While we may have slipped to a still respectable ninth place in 2024, even the ninth spot equals exports of over $100 billion to over 200 countries. Yet having the world’s second-largest economy shut its doors to us for a period of time turned our strength against us — and farmers felt that acutely.

For canola farmers in Saskatchewan, beef producers in Alberta, and seafood processors in Newfoundland, the lobbying that led to this agreement was existential. The fact that this agreement was endorsed jointly by Prime Minister Mark Carney and Saskatchewan Premier Scott Moe gives it durability and new direction. It doesn’t feel like a generic political win so much as a validation of a reality we too often overlook: The scale and sophistication of the agriculture and agri-food business and its importance in supporting Canada’s economic security.

When Agriculture Minister Heath MacDonald announced recently that China has already ordered 60,000 metric tonnes of Canadian canola seed, and that a shipment of Canadian beef would be headed to Chinese customers for the first time in years, that relief came full circle. Years of frustrated industry conversations and anxiety culminated in a renewed buyer relationship.

The speed of this turnaround was also surprising. Businesses benefiting from the agreement have seen an immediate change to their sales — a stark contrast to the daily conversations about broader economic transformation that will take decades to fully realize.

What’s striking now is the renewed sense that mutual market access is possible. Even sectors like pork, which remain unresolved, have described themselves as hopeful, recognizing progress when they see it. The broader sector has welcomed the door being opened, even an inch, for further dialogue.

None of this optimism erases a logical need for caution. The government is rightly assessing risk, including how it will manage EV imports and strengthen domestic auto manufacturing.

This “yes, and” approach matters. Our other markets, especially the United States, are not off the menu because the Canada–China relationship has found a stable structure in certain strategic areas.

Our 200 agricultural trading partners are worth cultivating. Nothing in business is riskier than having only one customer. That $100 billion in exports in 2024 wasn’t distributed evenly among our customers, nor should we pretend that it was. Our food ties to the United States remain deep at the same time the damage from the rift with China will soon show up in the 2025 numbers.

At the same time, climate pressures are intensifying with farmers already on the front lines. An often forgotten element of today’s agriculture is how much the modern farmer is also required to be a scientist or an engineer. Carbon sequestration and capture through agricultural production are among a farmer’s vocational requirements — and also some of our under-appreciated advantages. We deserve our global reputation as among the most advanced in sustainable agriculture. With our arable land and expertise across a wide range of crops and seafood products, we will increasingly be looked to as conditions worsen elsewhere, particularly in regions closer to the equator where growing certain foods may no longer be viable.

Agriculture remains the lifeblood of communities across this country. It sits at the nexus of trade, innovation, climate resilience, and economic security. Our trade advances with India, China, and Indonesia — countries with large populations — are squarely focused on where Canada has a true competitive advantage: farming, fertilizer, and feeding the world.

It could not be clearer who we are and what we contribute. Moments like this hit home. I have yet to fully debate with my dad the upheaval in geopolitics and its impacts on Canada’s prospects for feeding the world, but, today, I have a seed of hope.

Candace Laing, President and CEO, Canadian Chamber of Commerce

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Visit the Agriculture and Agri-food Committee to learn more about the Canadian Chamber’s advocacy.

As published in The Hill Times, an English-only outlet.

Canada’s well-diagnosed and ongoing productivity problem is not because of a lack of ideas or ambition; it is because of a failure to translate innovation into adoption across the economy. Take, for instance, this country’s second-place ranking for the largest pool of top-tier AI researchers in the world. Yet, Canadian businesses lag behind their international competitors in AI adoption.

In 2024, the Canadian Chamber of Commerce’s Business Data Lab (BDL) put forward two adoption scenarios in the report Prompting Productivity: Generative AI Adoption by Canadian Businesses. BDL predicted that Canada would reach an AI adoption tipping point of 50% between 2027 (fast adoption scenario) and 2030 (slow adoption scenario). Projections for 2026 AI adoption align with the slow adoption scenario. This pace is equivalent to Canada using dial-up while everyone else uses high-speed 5G.

The pace of digital adoption, its link to productivity, and productivity’s link to standard of living is the concern of policymakers — and they should be concerned. We are not talking about a technology issue or something only for economists to discuss. With our digital capabilities increasingly tied to capital investment decisions and long-term national growth, we are talking about a fundamental economic performance issue.

Digital capability is a prerequisite for export growth, supply-chain integration and economic resilience. Firms that adopt digital tools are better positioned to grow, diversify their markets, and withstand global shocks. Those falling behind on AI run the risk of not being viable in a global marketplace. And in today’s trade landscape, that is untenable.

Our global peers are moving faster and with greater strategic coherence to bridge the adoption gap. The United States is pairing large-scale digital infrastructure investment with incentives and regulatory clarity designed to accelerate adoption, not just innovation. The European Union is aligning digital infrastructure deployment, industrial policy, and standards-setting to reinforce competitiveness across its internal market, and it is being met with increased usage. In both cases, the emphasis is on ensuring that innovation and advanced technologies are adopted at scale for companies of all sizes.

Canada should take note. We have the ingredients for success, but favourable conditions alone are not enough. The policy framework must reinforce momentum rather than create friction. Addressing predictable barriers — retraining employees, hiring workers with high tech skills, ensuring security and privacy of data, and accessing financial resources to invest in new technology and to support implementation — is critical, especially for the small businesses that make up Canada’s economic backbone.

Still at the beginning of 2026, Canada is experiencing a rare moment of alignment. Governments, businesses, and the public increasingly agree on the need to improve productivity, reduce investment barriers, and strengthen economic competitiveness here at home. The fiscal and policy milestones ahead, including the upcoming Spring Economic Statement and the 2026 federal budget, provide a critical window to move from consensus to execution. But complacency is pervasive and can return in a second, which is why we must treat digital adoption not as a side-of-the-desk issue to manage, but as a central pillar of Canada’s economic competitiveness plan.

If we had common objectives, shared metrics — adoption rates, productivity gains, and company-wide performance — and genuine coordination across the innovation, infrastructure, and finance portfolios, we would hit that 50% metric much sooner.

The productivity problem does not need another research paper. It has been analyzed exhaustively. Long-term productivity gains will come not from innovation in isolation, but from widespread, practical adoption across the economy. Tangibles, like digital infrastructure, investment and adoption rates, are the decisive factors for whether we close the productivity gap and raise living standards for generations to come — or stay on dial-up and watch our country fall farther behind.

Alex Greco, Senior Director, Manufacturing and Value Chains

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Visit the Innovative Infrastructure Council to learn more about the Canadian Chamber’s advocacy.

As published in The Hill Times, an English-only outlet.

Hopeful Canadian homebuyers waiting for housing affordability to make a comeback will continue to have their optimism and stamina tested as the likelihood of closing Canada’s housing gap further deteriorates. To restore affordability to pre-pandemic levels, we need to double the pace of housing starts and reach 430,000 to 480,000 per year, which would completely buck the trend of consistent decline since September 2025. 

The numbers are grim, which is why many in the residential construction sector are hedging their bets on the promise of innovative methods. From modular homes produced in factories and assembled on site to cutting-edge 3D printing, several new approaches have emerged to help build safe, affordable, and comfortable homes up to 30- to 50-per-cent faster than traditional construction times. The next step should be as obvious as scaling these approaches, and yet the path forward isn’t that simple.

To build a modular house, a company must apply for a building permit from the municipality, a process requiring them to demonstrate that the project meets the technical requirements of the building code as well as other “applicable laws,” such as a municipal bylaw. If their project does not meet these requirements, the permit is not granted and no shovels go in the ground.

It’s even worse for a builder operating a single facility but aspiring to serve customers nationwide as they are forced to untangle a mess of different provincial, territorial, and municipal code interpretations. While the National Building Code of Canada and compliance standards provide a core trajectory, provinces and territories also enact their own building codes with unique requirements. A modular building unit approved in one province may face different criteria in another, requiring a redesign, re-testing, and additional documentation. Layer municipal bylaws on top of provincial and territorial codes and the modular industry, as well as the wider residential construction industry, ends up navigating a maze of dozens of overlapping and sometimes contradictory regulations. 

This approach to regulation creates uncertainty, slows down operations, increases costs, and limits product availability. Even minor discrepancies can put significant demands on time and investment. To make matters worse, as builders adjust their processes to suit whatever province and municipality they’re in, another update to building codes may well be announced.

In Canada, National Model Codes operate in five-year update cycles. Yet, in practice, they are subject to a barrage of post-publication revisions and errata packages—both ways to make minor off-cycle adjustments to the code. Since 2005, Canada’s building, fire, plumbing, and energy codes have undergone multiple editions and revisions. Rather than four scheduled updates over 20 years, there have been nine major revisions, including a staggering roughly 3,500 technical changes throughout almost 10,000 pages of code updates and revisions.

Provincial and territorial governments implement and modify these model codes at their own pace, meaning one jurisdiction might adopt a new iteration while another is still operating under an older version. The volume, frequency, and scattered nature of these changes forces builders to constantly review their projects to ensure compliance.

This regulatory environment results in builders shouldering significant administrative burden; companies are preoccupied with tracking and responding to code changes rather than focusing on scaling production and delivering the housing Canadians desperately need. Business confidence also takes a hit as a lack of regulatory certainty means risk for industry stakeholders working with long planning and investment horizons, which in turn discourages investment. When capital pulls back, housing delivery slows.

Canada’s residential construction sector can’t solve the housing crisis with innovative new technologies like modular housing while operating in a fragmented, constantly shifting regulatory environment. It’s time to stop the rule‑changing roller-coaster and give builders the certainty they need. Consistent nationwide standards that follow a predictable, regular schedule for updates will allow the residential construction sector to innovate and scale with confidence, and finally build the affordable houses hopeful homebuyers are waiting for. 

Olha Sotska, Policy Advisor, Canadian Chamber of Commerce

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Visit the Housing and Development Strategy Council to learn more about the Canadian Chamber’s advocacy.

As published in iPolitics, an English-only outlet.

By Candace Laing, President and CEO of the Canadian Chamber of Commerce

2026 has brought with it a rare alignment of the stars. Government, business and labour leaders across Canada agree on what our country needs economically — and more unbelievably, so does public opinion. 

An Ipsos poll in December found that three-quarters of Canadians support building new pipelines to ports in British Columbia and Eastern Canada to diversify export markets. A similar 71% said Canada’s approval processes for large projects take too long and need reform. In Quebec, 67% of Canadians backed the Marinvest LNG project to export natural gas to Europe. 

This alignment matters because, for years, Canada’s economic framework — the rules, incentives, and signals embedded in public policy — has been pulling investment and talent in a different direction. That framework is no longer fit for purpose. It has created friction rather than momentum, uncertainty rather than confidence, and hesitation rather than openness. The challenge now is whether we can pivot quickly enough to meet the moment. So, will we follow the stars or let this opportunity slip away?  

The fall federal budget laid some promising groundwork, detailing practical steps to support Canada’s competitiveness and long-term growth, including improving infrastructure, strengthening trade capacity, and investing in strategic sectors that drive jobs, like defence, steel, forestry and trade diversification infrastructure. These budgetary policy decisions matter to the mood of investors and businesses who have been sidelined or spooked since disruption musings began in late 2024.  

But favourable conditions alone don’t guarantee results — unless paired with smart public policy. 

On paper, the economy is growing. Real-time analysis from our Business Data Lab’s GDP nowcasting tool shows Canada growing between 2–3% in Q1. In practice, that growth is uneven. Large firms with scale and capital buffers are better positioned to adapt, while small and medium-sized businesses remain cautious, delaying hiring and investment as costs stay high and demand uncertain. Those businesses are not changing their trade patterns quickly, hoping this will all blow over. In communities where economic opportunity depends on a limited number of employers, that hesitation shows up as layoffs, pay freezes, and stalled community growth. 

Capital moves fast globally, and other jurisdictions are working aggressively to attract it. Canadian businesses can’t afford to hesitate. Without the economic momentum to restore consumer and business confidence, the gap between us and peer countries will only grow.  

For decades, our economy has sent clear signals about where to apply smart policy. Reducing red tape and reviewing our tax competitiveness to encourage investment and innovation. Better trade and transportation infrastructure to assist Canadian producers in efficiently reaching global markets. Aligning immigration, skills training, and regional workforce strategies to help employers fill critical gaps that domestic talent won’t. 

When companies grow, they hire more workers, pay better, and invest in their communities, which supports families and local services and builds stronger neighbourhoods. Business success is meaningful only if it improves lives.  

Addressing these signals determine whether Canada will deliver steady growth, good jobs, and economic optimism at a time when many feel stretched. Economic prosperity and community well-being go hand in hand, and public policy that strengthens one and not the other misses the mark. 

The unifying cause we see today across governments, sectors, and communities is a chance for Canada to shore up an economy that has all the ingredients for success but Parliament still has yet to follow key aspects of the recipe. We cannot again let political gamesmanship on any side of the aisle get in the way of the urgent task at hand. Voters are smart and they will not reward obstinacy in a crisis. 

The business community isn’t going to sit idle during this process and will push governments by proposing tangible strategies that are economically-driven, rather than public sector-directed like the current policy trajectory. We recognize there’s reasonable interventions to be made, but we cannot let public policy become a matter of picking winners and losers again.  

Moments like the one 2026 is presenting us are easy to miss and hard to recreate. Looking ahead at the fiscal cycle, there are clear opportunities for implementing that smart public policy I mentioned. The next and most obvious is the newly timed federal Spring Economic Statement. Government should remember that business leaders and Canadians have only so much patience and are expecting tangible plans with clear and measurable deliverables.  

We cannot afford to lose the sense of urgency that helped galvanize public sentiment in 2025. As Parliament prepares to return, our politicians should remind themselves of that. 

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View our Advocacy page to learn more about the Canadian Chamber’s work.

We published our first Policy Matters on USMCA (also known as CUSMA in Canada) in August 2024. As a quick refresher, the United States-Mexico-Canada Agreement is a free trade agreement that underpins the critical economic partnership among our three North American economies. USMCA took effect in March 2020, replacing the North American Free Trade Agreement (NAFTA). It’s up for review in July at which time the three countries will decide whether to extend USMCA for a new 16-year term. If they choose not to, there will be a review every year until the Agreement terminates in 2036.

This review was on our radar back in 2024 because of the looming United States presidential election and the growing bipartisan consensus on “Buy American” protectionist policies that was — and still is — at odds with USMCA’s goal of North American economic cooperation. At the time, we launched a concerted outreach campaign reminding Americans of why a healthy relationship with Canada is important to their communities, their businesses and their nation’s economy.Unfortunately, in spite of these efforts and the efforts of the Canadian government, President Trump followed through on his tariff threat and created a highly uncertain trade and business environment for all three USMCA nations.

Why Is USMCA Important?

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Because of USMCA, Canada, the United States, and Mexico share one of the largest trading relationships in the world, jointly accounting for almost a third of global gross domestic product (GDP). There is concern that the United States will seek changes to USMCA that are detrimental to the interests of Canada and Canadian businesses — or pull out of the Agreement all together.

Businesses across Canada rely on the stable and predictable trading environment USMCA has created. Last year, business use of USMCA reached a 20-year high. The share of goods exports to the U.S. claiming NAFTA/USMCA tariff preferences surged to 53% in 2025, up from around 37% in 2024. USMCA shielded Canada from some of the worst potential economic fallout caused by the U.S. tariffs.

What Do We Want from the “New” USMCA?

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Understandably, many Canadians are wary of the upcoming review — wary of past U.S. behaviour on tariffs and unpredictable policy shifts, and wary of a process that could disrupt an already fragile trade situation. Despite these reasonable concerns, Canada has an opening not just to protect our access to the U.S. market, but to help shape a future-proofed continental trade framework that includes digital commerce, regulatory coherence, and integrated supply chains.

To ensure that the 2026 USMCA review is successful and beneficial to all three contributing countries, we think it should focus on the following strategic priorities:

Secure the continuity of the Agreement and its existing key provisions. A fractious USMCA review would harm businesses that rely on the stability and predictability of the trilateral trading relationship enabled by the Agreement.

The three countries must avoid turning the review into a renegotiation that drastically changes the terms of the Agreement. Any changes should be additive and transparent and done with the objective of updating and modernizing the Agreement, while avoiding negative impacts to business or sectors within any of the three economies. Additionally, retaining the trilateral character of the Agreement is essential. Businesses benefit substantially from trade rules that apply across the breadth of the North American economies.

Implement targeted measures to strengthen the Agreement and enhance North American economic security. The review is an opportunity to build upon the successes of the Agreement, address shared geopolitical challenges, enhance North American competitiveness, and access the untapped potential of the North American economic relationship.

Our recommendations:

• Establish North American regulatory alignment.
• Enhance workforce development and mobility.
• Establish a robust competitiveness agenda for the automotive, aerospace and defence, critical minerals, energy, life sciences, advanced manufacturing, and financial services sectors.
• Ensure that the Agreement keeps pace with advancements in digital technologies and heightened cyber threats.
• Modernize rules of origin requirements and the processes that presently hinder customs administration and trade facilitation.
• Develop North American coordination on trade and security risks posed by non-market economies.

Strengthen North American economic integration by reducing or eliminating tariffs. Tariffs within North America disrupt integrated supply chains, raise costs for consumers, and weaken our global competitiveness.

Our recommendations:

• Unwind recent Section 232 tariffs against Canada and Mexico.
• Broaden preferential tariff treatment for USMCA compliant goods.
• Introduce a USMCA rapid response mechanism for tariff escalation.

Getting USMCA right would give our three North American economies a more predictable and attractive business environment in which we compete not with each other but with the shifting global economic forces that threaten the rules and norms stable economies rely on.

We shared our priorities with the Office of the U.S. Trade Representative, Global Affairs Canada, and Mexico’s Ministry of Economy in 2025. Our full submission is available here.

What Happens if USMCA Doesn’t Go Our Way?

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Canada has everything we need to be economically prosperous and resilient — natural resources, a talented and educated workforce, a rules-based market. Except, to take full advantage of our potential, we must first address our underlying economic challenges:

• Declining competitiveness and appeal as a place to do business
• Low productivity
• Burdensome taxes and regulatory red tape
• Shrinking business investment
• Lack of incentive to retain IP instead of selling it
• Overreliance on individual trading partners

If we act now and address the main challenge, Canada’s overall competitiveness and appeal as a place to do business, many of the secondary problems will consequently get resolved. Then, no matter what happens with USMCA, we can exceed economic expectations and secure our prosperity.

On December 8, senior business leaders, government representatives and international partners from across the G7 came together in Montreal for the Industry, Digital and Technology B7 Ministerial Side Event, hosted by the Canadian Chamber of Commerce in collaboration with Innovation, Science and Economic Development Canada (ISED). The event built on the momentum of the 2025 B7 Summit and official B7 Communiqué while also mirroring the key topics that were being discussed at the G7 Ministerial.

Catherine Fortin Lefaivre, Senior Vice President, International Policy and Global Partnerships at the Canadian Chamber of Commerce, welcomed attendees and set a collaborative and positive tone for the afternoon’s agenda, starting with a keynote address from Minister of Artificial Intelligence and Digital Innovation Evan Solomon.

Minister Solomon stepped away from hosting the G7 Ministerial to remind B7 attendees that technology should reinforce open markets, not fragment them, and that in an increasingly divided world, the G7 represents alignment. He acknowledged that while AI is a divisive technology that’s rewriting every sector of our economy, it is also a defining force of competitiveness. The second wave of technology, quantum, is approaching and will open entirely new markets, unlock discoveries and define what will happen in the months and years ahead. But the adoption of technologies like AI and quantum moves at the speed of trust, which is why the federal government is trying to design a system that is as agile as the technologies they govern. Minister Solomon promised that the next phase of Canada’s AI and quantum strategy will be not only robust but competitive, bolstering commercialization and putting Canada in the driver’s seat.

Panel 1: Propelling AI Adoption Across the G7

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The panel started out with a strong message to attendees — AI is not just an opportunity but an imperative. They emphasized that infrastructure matters because connectivity is critical to scaling compute and ensuring more people have access to these technologies.

The panel made a case for layering specific data on top of general-purpose models to ensure you have a model that knows your use case and can provide subject matter expertise. They also addressed major barriers to diffusion and adoption — electricity/energy, lack of connective infrastructure, and worker skilling — as well as some less obvious barriers like language. The question posed was, how do we bring more languages online to increase adoption? Building more purpose-built tech stacks, instead of general-purpose models, will allow for more cultural and language nuances to “localize” AI.

Panel 2: Supply Chain Resiliency

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Panel 3: Leveraging Open Source to Achieve AI Sovereignty and Economic Security

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Moderator: Valeria Pisano, President and CEO, Mila

Speakers: Kevin Chan, Senior Director, Global Policy Campaign Strategies, Meta; Irene Solaiman, Chief Policy Officer, Hugging Face; Marc Surman, CEO, Mozilla.

The panellists, all strong advocates of open source AI, emphasized its ability to accelerate innovation, democratize access, and lower the cost of adoption. Though sovereignty and open source can appear at odds, the panelists argued that open source lets users take something that’s been started and then “own” it, instead of “renting” it. Organizations or governments can take open source and then make it suitable for their cultures, including by building in local languages and dialects.

And because not every country can create a vibrant AI driven economy from the ground up, open source lets countries catch up almost immediately since it’s already built and usually only a few months behind pioneer models. The panelists called it an essential starting point for any middle power and encouraged governments to be more vocal about the benefits of open source.

Panel 4: Enhancing Our G7 Defence Industrial Base Coordination

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Moderator: Joanne Lostracco, Director General (Washington Sector), Defence Procurement, Public Services and Procurement Canada

Speakers: Johan Gott, Director, Corporate Advisory, Eurasia Group; Martin Rivest, Head, CortAIx; Rajeev Roy, Chief Technology Officer, D-TA Systems Group; Keith Webster, President, Defense and Aerospace Council, U.S. Chamber of Commerce.

This panel addressed challenges in government procurement, pointing to a persistent disconnect between producers and end users. Panellists called for government to help clear the path from R&D to implementation. One panellist emphasized that economic security only happens where there’s national security — nations need to spend the money to procure the necessary materials to outfit the military. This is a prerequisite for national security, which is itself necessary for enabling economic security. Panellists recognized that AI is not just an add on — it’s a backbone that must be deployed to foster the ecosystem that will start bringing the innovation to our militaries.

Panel 5: Resilient Approaches to Building AI Infrastructure Across the G7

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Moderator: Marc-Etienne Ouimette, Founder, Cardinal Policy

Speakers: Shannon Bell, Executive Vice President, Chief Digital Officer and Chief Information Officer, OpenText; Chris Lehane, Chief Global Affairs Officer, OpenAI; Chris Mada, Vice President, Customer Digital Solutions and Product, Telus; and Imran Shafi, OBE, Senior Vice President, NScale.

The final panel of the day focused on operational sovereignty — who owns the kill switch if something goes wrong? — and differentiating what needs to remain sovereign and what can continue to operate in the public domain. Panellists acknowledged that standing up data centres at the size and scale for general purpose data sets is hugely expensive; they should set up centres only for what is critical, like protected data sets that must remain sovereign. The panel warned that there’s a danger in throwing money at infrastructure that the countries don’t need. Instead, governments should help facilitate demand and ensure access to compute for researchers who want to work in the country or work with the local business community to incentivize them.

Panellists encouraged attendees to invest as locally as possible to have a strong workforce and strong economic levers, but not to invest foolishly. Harkening back to an earlier panel, they told attendees to find a blueprint or start from open source rather than beginning from the ground up.

Spotlight on Technology

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Final Moments

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To conclude the evening, our President and CEO, Candace Laing, provided some reflections on the day and her time at the G7 Ministerial event nearby before handing the stage over to Jill Briggs, Manager, Public Policy at Meta. Then Minister Evan Solomon returned to greet delegates for the G7/B7 Welcome Reception before ceding the stage to Minister of Industry and Minister responsible for Canada Economic Development for Quebec Regions Mélanie Joly. We are grateful for the participation of the Ministers.

B7 2026

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This Ministerial marks the end of the Canadian Chamber’s official duties as the B7 2025 President. We look forward to handing over the privilege and responsibility of representing the B7 on the world stage in 2026 to our colleagues in France.

Look back on our year as B7 President

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Thank You to Our Sponsors

This event would not have been possible without the support of our sponsors.

Thank you for joining us for another year of Policy Matters, our monthly blog series that turns dense public policy into informative and interesting reads.

While we covered a broad range of topics in 2025, from the B7 to federal procurement to Canada’s skills gap, the standout topics of this year were energy security, economic sovereignty, and Canada’s agriculture and agri-food industry.

Let’s take a walk down memory lane to revisit the most popular topics of the year and see how things have changed since publication.

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How to Grow Canada’s Agriculture and Agri-Food Industry

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Why Energy Security Matters Yesterday, Today and Tomorrow

Energy is so readily available and reliable in most regions in Canada that we may not always think about where it comes from — or what we’d do without it. The new digital economy needs more power and energy than ever before, and in order for our next generation to compete and thrive, we need to build capacity at home.

Achieving Canada’s potential to be an energy superpower and dealing with increasing geopolitical shifts requires unprecedented levels of federal-provincial collaboration. We’ve long called for provincial, territorial and federal governments to work together so we can build a responsible and thriving energy sector, invite investment, create jobs, and strengthen Canada’s competitiveness. 

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Why It’s Time to Go All-In on Canada’s Economic Sovereignty

In response to U.S. tariffs and Canada’s economic challenges, we launched the All-In Canada Plan in February, which focuses on doing what’s in our control to build a stronger, more resilient Canadian economy. The plan focused on four priority areas: internal trade, infrastructure, red tape, and taxes.

There has been positive progress on this priority throughout the year, but we are especially encouraged that provincial, territorial and federal governments signed the Canadian Mutual Recognition Agreement in November. This agreement allows thousands of products to be traded across internal borders and is a positive step toward the free movement of goods, reducing fragmentation and lowering costs for Canadian businesses. We look forward to both the implementation and the expansion of this deal to cover all goods.

Canada’s economic success is rooted in being a trading nation. However, the transportation of goods across Canada to other provinces/territories and internationally has not been efficient or reliable for years. Unfortunately, we haven’t seen much positive momentum on this priority. Though the Federal Budget included the creation of the Trade Diversification Corridors Fund and the Arctic Infrastructure Fund, these investments must be followed by concrete action on reducing regulatory red tape for all infrastructure projects, not just those designated by the Major Projects Office.

While we believe the Federal Budget has heard businesses’ call to focus on the economy, there is still a desperate need to reduce the amount of red tape. According to the Canadian Chamber’s Business Data Lab (BDL), we’ve only seen reductions in red tape during times of crisis, like the global economic crisis in 2008 and the COVID-19 pandemic. Otherwise, government regulations have steadily increased since 2006 — especially in the past five years. BDL projects that the total number of federal regulatory requirements reached approximately 348,700 in 2025 — up from 320,900 in 2021 — and each federal regulation takes an average of nine hours to comply with!

In July, the government announced a Red Tape Review. The results of the 60-day reports identified 500 recent achievements and forward-looking actions to reduce regulatory red tape. This represents a critical opportunity. In December, the private and public sectors came together at the Red Tape Reduction Summit, hosted in partnership with the Treasury Board of Canada Secretariat. Our collective aim was to build a more competitive and business-friendly regulatory and to find a way to make reducing red tape a permanent fixture of our government operations, from the Major Projects Office to Health Canada and beyond.