Montreal — With Canada facing economic uncertainty, global instability, a deepening housing crisis and threats to its sovereignty, it’s time to use innovative industrial policy tools to drive private sector investment in priority areas. A new report from the Institute for Research on Public Policy (IRPP), Building for the Future: How Industrial Policy can Strengthen Canada’s Economy and Sovereignty, shows how a smart industrial strategy can help Canadian governments address unprecedented challenges. 

“Industrial policy — where governments steer economic activity to address a public priority — can have a big impact when it’s used with discipline,” said Rachel Samson, the IRPP’s Vice President of Research. “Right now, our industrial policies are fragmented, which limits their ability to achieve results. But with an approach grounded in sound strategy, good governance and rigorous evaluation, governments can more effectively strengthen Canada’s economy and sovereignty — whether they’re enhancing defence capacity, diversifying supply chains or boosting housing construction.”

To make industrial policy work better, the IRPP recommends that the federal government:

• Develop an industrial strategy with clear priorities or missions and focus on a small set of high-impact interventions;
• Identify and address barriers to private investment;
• Review existing programs and reallocate funds to those that align with national priorities;
• Select and design policies to promote Indigenous Economic Reconciliation and full economic participation across Canada;
• Create a Centre of Excellence on industrial policy to guide effective and efficient policy design and implementation; and
• Leverage the capacity and expertise of arm’s-length institutions such as Crown corporations to deliver results.

The report suggests governments pursue industrial policy in key priority areas: defending Canadian sovereignty; diversifying trade; accelerating housing construction; preparing the economy for shifts from climate change, artificial intelligence and the energy transition; advancing Indigenous Economic Reconciliation; and promoting more inclusive and geographically distributed growth.

“A smart approach to industrial policy doesn’t mean taking unnecessary risks. We’re calling for careful planning, open communication with the public, and a laser focus on pressing challenges that the private sector cannot — or will not — solve without the right incentives and supporting policies in place,” said IRPP research director Steve Lafleur.

“Canadians are right to expect transparency and results. But we can’t let caution become inaction. If we focus our efforts, learn from past experience and work together, we have a real opportunity to seize on this unique moment in our history to begin building a stronger, more secure future.”

A six-member steering group has guided the IRPP’s industrial policy project over the past two years, which has gathered insights from more than 100 experts from academia, government, non-profits, business, trade unions and Indigenous organizations.

MEDIA CONTACT

Tim Duboyce
514-604-9282 • tduboyce@nullirpp.org