The Song Remains the Same
With the SEU, Trudeau's ghost haunts us still. The art of Kazuo Nakamura. Happy birthday, HBC. And we've got events for you.
The Carney government’s Spring Economic Update arrived on Tuesday flanked by a cluster of announcements that added up to something like a governing philosophy: when the Canadian economy faces a structural problem, the answer is to build an institution to address it.
This is not a new; it has been pretty much the governing philosophy of this Liberal government since 2015. And the Spring Economic Update is pretty much the kind of document Justin Trudeau could have tabled. From the increasingly vapid sloganeering (”Canada Strong for All”) to the sector strategies for every industry under the sun to the new institutions stacked on top of old ones to the transparently bogus smiley-face presentation of the government’s debt situation, it’s time to face the facts. Justin Trudeau is gone, but his spirit haunts us still.
The headline item was the Canada Strong Fund, billed as Canada’s first sovereign wealth fund. Capitalized at $25 billion and equipped with a retail investment product so that ordinary Canadians can “share in the returns,” it is designed to invest in strategic projects across energy, critical minerals, agriculture, and infrastructure. The model, Carney suggested while standing in front of some steam locomotives at the Canada Science and Technology Museum, is Norway’s Government Pension Fund Global.
The Canada Strong Fund is not that. Norway’s fund is financed by decades of oil surpluses; Canada’s will be financed by borrowing, against a federal debt now exceeding $1.2 trillion and a projected deficit of $66.9 billion this year. Norway’s fund deploys capital abroad as a structural safeguard against political horse-trading; Canada’s will deploy capital domestically, into projects the government has already decided are strategically important. What Norway built to prevent is precisely what the Canada Strong Fund is designed to do.
Writing in the Globe, Andrew Coyne noted that the government’s own update inadvertently exposed the problem: in the course of explaining why the new fund is needed, the SEU lists all the institutions already doing the same work — the Canada Infrastructure Bank, Export Development Canada, the Business Development Bank, the Canada Growth Fund, the Canada Indigenous Loan Guarantee Corporation. These, the government assures us, are “already playing a critical role.” The Canada Strong Fund will “complement these efforts.” But if these institutions are already doing the job, what remains for the new Fund?
The deeper problem is what the SEU doesn’t address. Canada’s GDP per capita has slipped to 38th globally. Business fixed investment declined for the second straight year in 2025. The government’s own long-term projection is for inflation-adjusted growth averaging 1.7 per cent — half the rate of the 1970s and 80s, a third of the postwar decades. The “whole of government competition plan” unveiled in the update amounts, as Coyne puts it, to a watery promise to limit “the potential negative impacts on competition that can, often inadvertently, stem from government policies.” This is pure Trudeaunomics.
On the same day the SEU landed, the Financial Times published a piece citing Canadian leaders from the forestry, oil and gas, and automotive industries lamenting that regulatory reform, supposedly central to the Carney agenda, is floundering. Even Bank of Canada governor Tiff Macklem, in an interview this week, identified regulatory approval timelines as the primary barrier to foreign investment. “These regulatory approvals, they are in place for well-intended reasons,” Macklem said, “but they’re having unintended consequences.” He offered a polite verdict on the SEU’s direction (”encouraging”) before adding: “a lot of it is about execution.” From one central banker to a former central banker, that’s a warning dressed in diplomacy.
Not everything this week warrants the same skepticism. The selection of Canada to host the Defence, Security and Resilience Bank — a new multilateral institution providing low-cost financing for NATO defence projects — is a genuine strategic win. All of Canada’s Big Six banks have signed on alongside major international players including JPMorgan and Deutsche Bank. If it comes together, it could put Canada at the centre of a significant reorganization of Western defence finance.
The outstanding question is where it will be headquartered. Four cities are competing: Montreal, Toronto, Ottawa, and Vancouver. The smart money points to Montreal, which is, of course, the only Canadian city the federal Liberals seem to think exists when distributing marquee institutions. Toronto’s financial depth, Vancouver’s Pacific positioning, and Ottawa’s proximity to national security infrastructure will all be duly weighed before the government presents us with the decision it has clearly already made.
Mark Carney is a serious person, and his diagnosis of what ails Canada is largely correct: over-reliant on the United States, under-invested in productive capacity, running out of time to address a productivity crisis that has been building for a quarter century. The problem is not the diagnosis. It is that his prescriptions keep arriving in the same institutional form that his predecessor reached for, and which only made the problems worse.
The regulatory environment that is deterring private investment is not going to be fixed by the Canada Strong Fund. The productivity gap is not going to be closed by the Defence Investment Agency. The drift toward managed decline that Carney himself identified as a national crisis is not going to be reversed by complementing the Canada Infrastructure Bank with yet another arms-length institution.
Carney ran as the man who understood the crisis facing Canada. The Spring Economic Update suggests he remains captive to the assumptions that produced it.
Kazuo Nakamura (1926–2002)
Kazuo Nakamura was born in Vancouver in 1926, the son of Japanese immigrants. During the Second World War, he was interned as an “enemy alien” — one of some 22,000 Japanese Canadians forcibly displaced by the federal government. He resettled in Toronto, studied at Central Technical School, and in 1953 became a founding member of Painters Eleven, the group that introduced abstract art to English Canada.
What set Nakamura apart from his fellow Painters Eleven members was less technique than philosophy. Where others worked in the expressionist tradition, he was absorbed by the relationship between art and science. He read science journals seriously and came to believe the two disciplines were engaged in the same project. “I think there’s a sort of fundamental universal pattern in all art and nature,” he said in 1956. “In a sense, scientists and artists are doing the same thing.”
That conviction shaped everything he made. His “inner structure” paintings of the 1950s used layered geometric forms to evoke the hidden architecture of the natural world. Later, in the 1970s and 1980s, he moved toward grid paintings incorporating the Fibonacci sequence, laboriously inscribed works that amounted to a search for ultimate order in apparent chaos.
This Week in Building Canada
May 2: On this day in 1670, the Hudson's Bay Company was incorporated by Royal Charter of King Charles II, launching North America's oldest corporation and one of the world's great trading enterprises. Also on this day in 1939, the National Film Board was created.
May 3: The act to create the Royal Canadian Mounted Police was introduced on this day in 1873.
May 4: The Royal Canadian Navy was founded on this day in 1910.
May 5: On this day in 1973, CN Tower construction officially commenced in Toronto, a 40-month project that produced the world's tallest free-standing structure.
May 6: On this day in 1984, the first section of the Coquihalla Highway in BC was approved for funding, the the most challenging highway construction project in Canadian history.
Also in 1931, actor William Shatner was born in Montreal. Here he is singing O Canada for the NFB:
Spring Economic Update
"This Spring Economic Update points in the right direction, but Canada cannot incrementalize its way out of a productivity crisis. There is real progress here – on procurement, SR&ED, and the discipline of cutting consulting spend. This is the warm-up. Budget 2026 will be the true test of whether this government, with a new majority, can boldly execute the vision needed to build a 21st century innovation economy."
— Lucy Hargreaves, Co-Founder and CEO, Build Canada
On Tuesday, Lucy attended the Spring Economic Statement press release. The update was packed with financial data, policy announcements, and fiscal projections, and our objective, as always, is to present this information through a builder’s lens.
Read our full statement here, and see our scorecard below.
EVENTS
The Case for a United Canada
Calgary is showing up. The highly anticipated event has reached full capacity but do not stress. We have a waitlist & overflow room available. Grab tickets while you still can here. 🇨🇦
On May 11, join Hon. Jason Kenney, MP Corey Hogan, and an audience of 500 others at the University of Calgary for an honest discussion moderated by Jen Gerson on what it will require to build a stronger nation.
What it will take to Build in Canada
Toronto Tech Week is right around the corner, and Build Canada and Ada CX are teaming up to host a killer mixer. 🇨🇦 On May 26, join us for an evening of panel discussion with Lucy Hargreaves and Mike Murchison as we outline what it will take to make Canada an AI powerhouse. The event is near capacity. Get your tickets here.
What else we’ve been reading
Be Giant has a long profile of Eliot Pence, the founder and CEO of Dominion Dynamics who is “turning Canada’s defence procurement upside down”
After twenty years of underfunding, Ottawa is finally putting real money back into amateur sport. Own The Podium!
Hockey fans in Buffalo finished O Canada after the singer’s microphone malfunctioned, validating the widely held view that Buffalo is a colony of Toronto.
The National Post published a feature called “Lost Decade” that included thirteen charts showing how much Canada suffered economically during the Trudeau years.
Hydro-Quebec has taken the lightning bolt out of its logo so they don’t jinks the Habs in their series against the Tampa Bay Lightning
Maggie Helwig has won the Shaughnessy Cohen Prize in Political Writing for her book Encampment, an in-depth look at the lives of homeless people in Toronto.
Get weekly, no-fluff insights on building a more prosperous Canada. Tap “Subscribe” now and be first in line for next week’s brief. Then forward this email to one friend who cares as much as you do—let’s build together.
Ah the good old days of Wage and Price Controls. Oh you mean the ghost of Trudeau the younger. So why isn't Carney turning our economy on a dime now?