Canada

Canada should approach exploratory talks regarding a Canada–EU digital trade agreement with caution. Greater alignment with the EU may appear to provide a hedge against U.S. influence, but in practice it risks importing a framework that impedes the potential for Canada’s digital economy and industries while raising compliance costs.

The Bureau should not treat algorithmic pricing as a risk category in itself. The relevant concern is not whether pricing is algorithmic, dynamic, or AI-enabled, but whether it is used to harm competition or consumers. Addressing that will require focusing on market context and firm conduct rather than the type of tool used.

Canada has zero entries among the world’s top 50 science and tech clusters. Waterloo is the best candidate for elevation. To make that happen, the federal and Ontario governments should create an incentive: Tech start-ups based in Waterloo, as well as firms outside Canada that relocate meaningful R&D and innovation production to the region, will pay no tax for a decade.

Canada needs a new federal institution that makes its innovation system more than the sum of its parts: a Canadian Innovation and Industrial Transformation Agency. This institution wouldn’t replace programs. It would govern them coherently, strategically, and at speed.

It’s more important than ever for Canada to invest in domestic production capabilities. Natural Resources Canada must update its value-added analysis to clarify the current state of the mining industry and guide sound industrial policymaking.

Canada stands at a pivotal moment to leverage its natural resource boom into long-term industrial strength by tying faster permitting and land access to reinvestment in innovation. A modest levy on resource extraction could fund a new federal agency focused on turning Canadian R&D into real production and globally competitive advanced industries.

Watch now for a virtual panel discussion from ITIF’s Centre for Canadian Innovation and Competitiveness. The webinar featured top experts as they explored whether growing external pressures might serve as a catalyst for renewed policy ambition in Canada’s innovation ecosystem.

Canadian firms are underinvesting in productivity-enhancing capital such as machinery, software, and advanced technologies. Without targeted reforms to boost investment and improve data collection, Canada risks falling further behind in global competitiveness and economic growth.

Canada risks falling behind as a low-productivity, resource-based economy just as China rises as a global technology leader and U.S. protectionism grows. To help turn the ship of state toward a technology-driven economy, the government should take the simple but impactful step of giving Canadian industry more say in setting university research priorities.

In an era when AI is poised to improve everything from crop yields to cancer detection, Canada’s central priority should be accelerating AI adoption to enhance economic prosperity and quality of life, not erecting barriers to innovation through overly precautionary regulation.