Canada is standing on the edge of an inflection point. As Parliament prepares for yet another budget showdown, the country’s economy is being pulled in multiple directions — squeezed by high mortgage costs, battered by global trade wars, and weighed down by years of policy drift.
Over the past year on ‘The Brian Crombie Hour’, I’ve spoken with many of the country’s top thinkers, including Benjamin Tal, Aled ab Iorwerth, Heather Exner-Pirot, Jim Stanford, Rick Anderson, and Paul Smetanin. In recent weeks, that conversation has expanded to include Carl Gomez, Jeff Rubin, J.D.M. Stewart, Pierre-Jean Esmieu-Fournel, Sam Sivarajan, and Sergio Marchi — voices that, together, offer a wide-angle view of Canada’s place in a turbulent world.
Taken as a whole, their message is clear: Canada’s problem isn’t ideology — it’s inertia.
Carl Gomez, Chief Economist at CoStar Canada, believes the Bank of Canada has reached the end of its influence. After raising rates to five per cent to combat post-pandemic inflation, the Bank has since eased back to 2.25 per cent — “close to neutral,” he says — but further cuts won’t save an economy that’s lost its growth engine.
“Interest rates can’t fix a trade war,” Gomez told me. “They can’t fix housing supply, productivity, or a lack of innovation. Those require structural change from governments, not central banks.”
He warns that 60 per cent of Canadian mortgages will reset within 18 months, adding roughly $1,000 a month to household payments. While most homeowners will hang on, the stress will ripple through consumption and confidence. “Retail sales have been surprisingly strong,” he noted, “but it’s not sustainable when debt servicing is eating into every paycheque.”
For Gomez, the housing correction is both necessary and dangerous: prices have softened, but construction is stalling. “The cure for high prices is lower prices — but only if we keep building,” he said.
This means streamlining approvals, cutting development fees, and focusing on family-oriented housing rather than investor-driven condos.
If Gomez diagnoses the domestic imbalance, Jeff Rubin maps the geopolitical fault lines shaping it.
In A Map of the New Normal, Rubin argues that Canada’s dependence on the United States has become a structural vulnerability. “The U.S. isn’t the champion of free trade anymore,” he told me. “It’s the architect of a new protectionist order — and we’re still behaving like its junior partner.”
Rubin believes Canada’s next wave of growth must come from trade diversification — not with the slow-growth economies of Europe, but with the expanding BRICS bloc: Brazil, Russia, India, China, South Africa, and new entrants like Saudi Arabia and Indonesia. “The future markets are in BRICS,” he said. “They’re young, industrializing, and growing fast. But Canada’s diplomatic ties are weakest where the opportunities are strongest.”
He also questions Canada’s reflex to mirror U.S. tariff policy, particularly the 100 per cent duty on Chinese electric vehicles when our only EV plant in Ingersoll sits idle. “We’ve become America’s echo,” Rubin said. “We need to rediscover our own economic voice.”
Looking ahead to next year’s USMCA review, he warns the agreement is “a dead man walking.” If Donald Trump returns to power, Canada could face bilateral negotiations on U.S. terms. “If that happens,” Rubin cautioned, “our lack of diversification will be exposed overnight.”
Historian and author J.D.M. Stewart, whose book The Prime Ministers: Canada’s Leaders and the Nation They Shaped traces the evolution of leadership from Macdonald to Mulroney, told me that Canada’s crisis is as much moral as it is economic.
“Great prime ministers understood how to unite a diverse country,” he said. “They practiced pragmatism, relied on teamwork, showed courage, and inspired with vision.”
Stewart argues that contemporary leaders — Mark Carney among them — must learn from that history: courage to make unpopular choices, pragmatism to balance competing interests, teamwork to empower competent ministers, and inspiration to give Canadians a reason to believe again.
He reminded me that Laurier’s optimism — “The twentieth century shall be the century of Canada” — wasn’t just rhetoric; it was a blueprint for national confidence. “Canada needs leaders,” Stewart said, “who can once again make us feel that our best days are ahead.”
To understand what happens when governments delay reform for too long, I turned to Pierre-Jean Esmieu-Fournel, a French investment banker and cancer survivor who’s seen both the generosity and the limits of France’s welfare state up close.
France, he explained, collects 64 per cent of GDP in taxes and spends lavishly on healthcare, pensions, and subsidies — but the model is buckling under demographic pressure. “My treatment costs €320,000 a year,” he said, “and I pay nothing. It’s humane, but it’s unsustainable.”
France’s debt now exceeds €3.5 trillion, its deficit 6 per cent, and political instability is rampant — five prime ministers in under four years, with 20 per cent of ministers under investigation. Pierre-Jean proposes a national referendum to reset expectations: reduce entitlements, raise the retirement age, and rebuild trust through transparency.
His warning for Canada is sobering: “When citizens believe the state will do everything, they eventually find the state can do nothing.”
The takeaway is clear — Canada must balance compassion with accountability before debt forces reform upon us.
Sam Sivarajan, behavioural scientist, former finance executive, and author of Making Your Money Work and Uphill, offered a complementary view: our fiscal problem is really a behavioural one.
“We forget,” he told me, “that every generation repeats the same cycle — overspend, then rediscover discipline the hard way.” Sam argues that Canadians deserve an honest conversation about the trade-offs in public finance: what we want, what we can afford, and who pays?
He supports separating operational from capital spending — the way businesses do — so governments stop borrowing for everyday costs. And he isn’t afraid of unpopular ideas: modestly raising the GST to restore fiscal balance, or gradually increasing the retirement age as life expectancy rises.
“Leadership isn’t about pleasing voters,” he said. “It’s about telling them the truth — and trusting that they can handle it.”
Both economists echo what earlier guests have described: a system that talks about growth but structures itself against it.
• Benjamin Tal has long argued that Canada’s fiscal architecture is broken — “the federal government has all the money, the provinces have all the power, and the cities have all the problems.” He believes empowering municipalities with stable infrastructure funding is essential for productivity.
• Aled ab Iorwerth of CMHC warns that the housing shortage is a slow-motion crisis. Mortgage delinquencies are rising, but the bigger risk is under-building during downturns. “When demand rebounds,” he told me, “supply won’t be there.”
• Heather Exner-Pirot, author of Constraining Canada, says environmental idealism has hardened into paralysis. “You can’t meet climate goals if you can’t build anything,” she argues, calling for reform of the Impact Assessment Act and faster approval of energy and mineral projects.
• Jim Stanford believes Canada must rediscover its industrial-policy muscles. “If everyone’s a buyer,” he said, “who’s the seller?” He supports tying market access to domestic production, as in the old Auto Pact.
• Paul Smetanin, head of the Canadian Centre for Economic Analysis, coined a term that captures it all: Ponzinomics — a growth model dependent on debt, immigration, and housing inflation rather than true productivity gains.
• Rick Anderson, veteran strategist and political adviser, told me Ottawa is caught in “a political game of chicken,” with parties poised to trigger an election instead of tackling structural reform. His warning was blunt: “Each political cycle without courage deepens the country’s malaise — we are running out of time to act.”
The pattern is clear. We’re addicted to expansion without transformation — a treadmill economy where population growth props up GDP but not prosperity.
That leadership deficit is precisely what Sergio Marchi, former cabinet minister, ambassador, and author of Pursuing a Public Life, believes must be confronted head-on.
Drawing on decades of experience in Canadian politics and diplomacy, Marchi argues that the country’s democratic health depends not only on better policies but also on better people choosing to serve. “Public life,” he told me, “isn’t broken — it’s simply short of participants.”
He worries that too many talented young Canadians are walking away from politics altogether, turned off by toxicity and cynicism. Yet, like the best public servants, he remains hopeful. His book — part memoir, part manual — offers 78 lessons on how to lead, listen, and govern with decency. He calls for a renewal of civics education, mentorship, and diversity in political recruitment so Parliament can once again reflect the face and values of modern Canada.
Marchi’s message complements the economists’ warnings: reforming our institutions won’t matter unless we also reform our culture of leadership. As he put it, “If you care about your country, you have to step up — not stand back.”
What Canada needs now is a coherent growth strategy rooted in productivity, diversification, and courage. That means:
• Cutting regulatory duplication to unleash investment in housing and infrastructure.
• Redefining industrial policy to reward companies that produce in Canada.
• Investing in AI, advanced manufacturing, and digital innovation.
• Building trade ties with emerging economies rather than only courting stagnant ones.
• Giving cities the fiscal tools to lead where senior governments stall.
The last generation of Canadian prosperity was built on stability, openness, and steady institutions. But the world has changed. The next will require speed, adaptability, and self-reliance.
Canada’s challenge isn’t that we lack ideas — it’s that we lack execution. We know what must be done: empower cities, reform regulations, diversify trade, and reward productivity. Yet we hesitate, preferring short-term politics to long-term policy.
If we continue on this path, the risk isn’t collapse — it’s irrelevance.
Tune in to Brian Crombie, host of ‘The Brian Crombie Hour’, at www.briancrombie.com or on all major podcast platforms.
Photo: iStock
