Canadian flags line a street in High River, Alta. on May 7, 2025. Photo by THE CANADIAN PRESS/Jeff McIntosh

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By Linda Hasenfratz and John Manley

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It’s impossible to ignore the drumbeat of negativity surrounding Canada’s economy. Every headline seems to point to a nation falling behind. And we’re tired of it.

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A culture of complaint has taken hold that is demoralizing as well as economically damaging. The more we talk ourselves down, the harder it becomes for Canada to attract investment, innovate and keep good workers. The words we say don’t fall to the ground at our border. As any coach knows, you don’t motivate your team by telling them what bad players they are.

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As business leaders, we see a different story, one of resilience and opportunity. Canada’s economy is strong, adaptable and full of untapped potential. It’s time to change the story and fight the gloom with facts and optimism.

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A good place to start is productivity — the favourite metric of pessimists. We’ve all heard that Canada’s productivity lags that of the United States. What few realize is that business productivity has steadily grown for 25 years, up roughly 50 per cent in that time. The weaker national average is weighed down by a distinct lack of any productivity in the public and non-profit sectors, where output per worker has been flat for two decades.

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This doesn’t mean those sectors don’t matter. Health care, education and social services are essential to our quality of life. But like business, they too can pursue greater productivity by using taxpayer and donor funds more efficiently and adopting innovations that deliver better outcomes for Canadians, just as business is so effectively doing.

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Reducing non-business-sector workers and shifting them into revenue-generating businesses would meaningfully move the dial on national average productivity.

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Even with these headwinds, Canada’s overall productivity has risen over time. Since 2014, productivity has grown by about 0.4 per cent annually. Output per hour worked in the past five years is more than four per cent higher than in the five years before the pandemic.

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Yes, we could do better. But the current panic is overblown. The slowdown in productivity growth is a challenge across advanced economies. And Canada’s record is solidly in line when compared with our G7 peers. The U.S. stands out from the rest of the world not because Canada is failing, but because its extraordinary technology sector has driven global-leading gains. Rather than lamenting the gap, we should learn from what drives their success.

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Productivity also varies by sector. Technology, financial services and advanced manufacturing have all had strong gains. In auto parts manufacturing, productivity is 8.2 per cent above 2019 levels and nearly 12 per cent higher than a decade ago.

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Canadian manufacturing overall has outperformed the U.S. in productivity growth over the past 15 years. It is growing at double the rate of the U.S., thanks to the powerful intersection of our technology sector and our deep manufacturing roots. Canada’s thriving artificial intelligence ecosystem, one of the world’s most dynamic, has supercharged innovation on factory floors.