The current Canada–U.S. trade dispute is shining a bright light on economic weaknesses that have been building in Canada for years.

Weak productivity growth, declining business investment and regulatory barriers are persistent issues that long precede this era of greater trade uncertainty that looks set to last beyond the current administration, as it did through Trump 1 into the Biden administration, and is now more global in scope.

Recent OECD work reinforces much of the diagnosis on the Canadian economy, where we sit near the bottom along multiple indicators compared to our peers. The 2025 Economic Survey highlights weak investment, poor firm-growth dynamics and internal regulatory barriers in Canada, and the 2026 Foundations for Growth and Competitiveness report points specifically to Canada’s restrictive product-market regulation and tax policies that can discourage firms from scaling.

Tim Sargent and Trevor Tombe get into these issues with me, where we cover the changing Canada–U.S. relationship and the future of CUSMA in light of the most recent flare up, but much of the discussion focused on what remains within our own control in the long run.

Among the reforms discussed were comprehensive tax reform—including corporate income taxes, small-business tax thresholds and personal tax brackets that can discourage firms from scaling or make Canada less attractive to ambitious entrepreneurs. Hearkening back to the Macdonald Commission that preceded the creation of NAFTA and enacted major tax reform, we would do well to revisit the idea again; further changes to the Impact Assessment Act and other regulatory barriers holding up major projects are necessary as the Major Projects office is otherwise just another layer of process and uncertainty; and actually operationalizing the internal-trade and mutual-recognition framework the Feds have tabled in the One Canada Economy Act and multiple provinces have struck up in unilateral and bilateral mutual recognition legislation, rather than allowing another set of promising frameworks to remain largely on paper.

The trade dispute may provide the political impetus to tackle economic problems Canada should have been addressing for years.