Key Takeaways 1

Introduction 4

Poor Performance 5

Productivity 5

Per Capita Income 5

International Competitiveness 7

Innovation 8

Causes 8

Low Business Investment in Machinery, Equipment, and ICT 8

Low Business R&D Spending 9

Few High-Growth Start-Ups 9

Why? Canadian Challenges 10

Dubious Causes 10

Oligopoly 10

Foreign Investment 11

Housing and Real Estate Crowding Out 12

Valid Causes 12

Small Domestic Market Made Smaller by Interprovincial Trade Barriers 12

Regulatory and Permitting 13

Too Many Small and Medium-Sized Enterprises 13

High Bankruptcy Costs 13

Hard to Fire Workers 13

Less-Deep Venture and Growth Capital Markets 14

High Immigration Rate 14

But Why? The Political Economy of Stability 14

Faulty or Shallow Analysis 14

The Talent and Research Input Illusion 14

Green Industry Optimism 15

The Immigration Hope 15

Infrastructure as the Answer 16

No Strong Coalition for Productive, Dynamic Capitalism and Policy 17

A Strong Natural Resource Sector and a Weak and Protectionist Canadian Tech

Sector 17

Banking and Real Estate 18

Unions 18

Universities 18

A Centre-Left Political Ecosystem Built Around Redistribution and Social Services 18

Conservatives Favor National Resources and Are Skeptical of a National Industrial

Strategy 19

Core Factors: Institutional 19

A Weak State 19

A Cautious State 20

Core Factors: Values 22

Redistribution as the Dominant Political Value 22

Stability as a Key Value 22

Shared Anglo-Saxon Challenges 23

Financial Short-Term Capitalism 23

Neoclassical Economics 24

A Procedural State 26

Conclusion 27

Errata 28

Endnotes 29