Policy Matters: Canada’s Next Competitive Advantage Starts at Home 

Each federal Budget responds to its time and builds on the last.  

What we build defines its long-term success.  

In 2025, following tariffs, sustained economic slowdown, and sovereignty questions, the test for the Budget was clear: respond to the palpable feeling of vulnerability after the previous global order was upended and put the country on a path toward economic security.  

The theme of the year for 2025 was fittingly “resilience,” especially in the face of tested trade relationships, supply chain disruptions, and investment stalls.  

The word of this year? Hopefully, “competitiveness.” The question Budget 2026 will seek to answer in the fall, is, “What will make us competitive for investment in the short, medium and long term?” 

With the global economy becoming less and less predictable, reduced IMF global growth expectations, and Canada still boasting natural economic advantages, we must divert from the status quo approach that was not putting our country top of mind for investors, and in many cases, simply making it too hard to do business here. 

Finance Minister Champagne frequently says, “There aren’t a lot of people around the world who wake up every day thinking about Canada.” In order to attract investment to grow businesses, create new ones, and fuel our economy going forward, we need more of them to have us top of mind. 

Key metrics show us we are falling short of our potential. Capital investment that seems primed for Canada too often is still going elsewhere, despite a shift in rhetoric and key policies. 

Our thinking also needs to change. We cannot simply expect the world to choose Canada; we must compete to win, and to bring global investment and talent to our country. If the sticker price of taxes and regulations is too high, we cannot be surprised when other jurisdictions to the south or overseas begin to eat our economic lunch.  

Over the past year, businesses have sought to connect with new markets, looked for ways to become less susceptible to outside forces, and, in many cases, simply paused to adapt. 

These trends are not a blip, so the conversation needs to shift into second gear. 

That was the central message behind the Canadian Chamber of Commerce’s written submission to the House of Commons Standing Committee on Finance for its consultations in advance of Budget 2026. Of note, the Department of Finance is currently soliciting feedback as well, due at latest September 8, 2026. 

Drawing on the experience of our network, our members and our expert team, our recommendations focus on one question: 

How do we make Canada a better place to build, invest, innovate and grow? 

Competitiveness begins at home 

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Admittedly, Canada cannot control every force shaping the global economy. What we can control is the environment businesses encounter in Canada when they choose where to invest. 

Here at home, too many employers today face lengthy permitting timelines, overlapping regulations, a tax system that has grown increasingly complex and a cost structure that makes competing against other jurisdictions more difficult than it should be. 

Those barriers slow investment, delay projects and weaken Canada’s ability to compete for capital at a time when other countries are actively attracting it. 

Canadian businesses are ready to do their part. The challenge is creating an environment where their ambition and solutions-oriented approach is rewarded. 

That starts with taking a fresh look at the rules businesses navigate every day. 

Our submission calls for a comprehensive review of the Income Tax Act to reduce unnecessary complexity and compliance costs, alongside broader efforts to modernize regulation and streamline government approvals. 

Businesses also need certainty when making long-term investment decisions. Extending measures such as the Productivity Super Deduction and maintaining predictable, rules-based investment incentives would give companies greater confidence to invest in new equipment, digital infrastructure and technologies that improve productivity. 

Productivity remains Canada’s biggest opportunity 

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Despite the size of the challenges we face, Canada has many of the ingredients needed for long-term economic success. 

Our researchers are among the world’s best. Canadian workers are highly skilled, and entrepreneurs continue to develop innovative products and services across every region of the country. 

Leveraging those strengths into stronger productivity has proven more difficult. 

For years, Canada has struggled to commercialize research, accelerate technology adoption and ensure workers have the skills businesses need as the economy evolves. 

Closing that gap requires a more connected approach. 

Labour market planning should reflect economic demand, with immigration, skills development and workforce participation working together to address real shortages across sectors and regions. Faster credential recognition, more flexible skills training and stronger employer involvement in workforce development would help Canadians put their talents to work more quickly. 

Technology adoption deserves more attention than it is getting; rather than assuming, we need to ensure we are keeping pace. 

Canada has earned an international reputation for leadership in artificial intelligence research, yet many small and medium-sized businesses still face practical challenges adopting AI in their day-to-day operations. Our Business Data Lab research suggests this leads to a lag effect for SME trade diversification, as larger firms lead the charge on making moves to diversify presently. 

Clear guidance, targeted support and easier access to expertise can help more businesses move from exploring AI to using it in ways that improve productivity and competitiveness. 

Innovation is one of Canada’s economic strengths that could be better leveraged. Ensuring businesses can adopt and scale that innovation should be a priority for 2027. 

Economic security and competitiveness go hand in hand 

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The past few years have demonstrated that economic security can be a critical part of, and also extend beyond, traditional national security. 

Reliable supply chains, dependable transportation networks, access to critical minerals and resilient domestic industries have all become strategic advantages in a world fogged by permacrisis.  

Canada has an opportunity to build on those advantages in the coming years. 

Our recommendations include: strengthening domestic medical supply chains, improving traceability for critical minerals, accelerating responsible resource development and continuing the work already underway to remove barriers to internal trade. 

Taken together, these measures would make Canada more resilient while unlocking new opportunities for businesses to grow. 

Maintaining reliable transportation infrastructure is equally important. Canadian companies work hard to earn the trust of customers around the world. When goods cannot move because critical transportation networks are disrupted for prolonged periods, those relationships become harder to maintain. 

As the importance of trade increasingly dominates the public discourse, protecting Canada’s reputation as a reliable trading partner should not be undervalued. 

Building on today’s momentum 

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The encouraging news is that Canada has already begun moving in the right direction. 

Governments across the country are making progress on internal trade. There is renewed attention on major project approvals, permitting reform and reducing unnecessary regulatory burden. Businesses have demonstrated remarkable resilience in adapting to changing global conditions. 

Budget 2026 is an opportunity to build on that momentum. 

Many of the recommendations in our pre-budget submission do not require reinventing Canada’s economic strategy. They involve making existing systems work better, giving businesses greater certainty and creating conditions that encourage bold investment over hesitation. 

Canada has the talent, natural resources and entrepreneurial spirit to compete with the best in the world. The next step is ensuring our policy environment effectively harnesses those strengths. 

That means making it easier to grow a business, invest in new ideas, adopt emerging technologies and move goods both across the country, as well as around the world. 

Competitiveness is not an end in itself and intuitively may feel somewhat un-Canadian as an objective. We settle for punching above our weight, given our relative size. Seeking the top spot can feel taboo.  

Yet competitiveness and global mindedness is how Canada will generate stronger economic growth, higher living standards and greater opportunity for the people and businesses from coast to coast to coast.  

The threats we faced last year are not behind us, but this year must be about building on the resilience we have to compete in the future: a country that is more competitive attracts more investment, grows more businesses, creates more jobs and is better equipped to withstand whatever comes next.