A new report from the Canadian Chamber of Commerce’s Business Data Lab (BDL) highlighted the critical role of Canada’s natural resources sector in tackling the nation’s productivity problem.
The report, titled “Canada’s Natural Wealth: Highlighting Canada’s Strong Natural Resources Sector, Assessing Economic Challenges, and Identifying Growth Opportunities,” called for increased investment and support in the sector to boost productivity and improve living standards.
Canada, one of the least productive nations in the G7, faces economic challenges, including declining productivity, low living standards, regulatory uncertainty, and weak business investment. The Bank of Canada and the International Monetary Fund (IMF) have both emphasized the need for urgent action, with the IMF recently noting that raising productivity remains a key priority for the nation.
"The natural resources sector is a significant part of the Canadian economy, benefiting industries throughout the supply chain," said Andrew DiCapua, senior economist at the BDL and lead author of the report. "In 2023, the sector offered compensation nearly $25,000 above the national average, demonstrating its productivity strength. Increasing investment in high-productivity sectors like natural resources is a clear remedy to Canada’s productivity challenges."
The report suggested that a national strategy promoting the sustainable development and export of Canada’s natural resources can help address these challenges. Such a strategy would aim to align environmental goals with economic benefits. Additionally, the sector has a higher-than-average Indigenous workforce participation, offering opportunities for increasing Indigenous employment and promoting economic reconciliation through support for Indigenous-owned businesses and partnerships.
Key recommendations from the report included simplifying Canada’s regulatory environment, expediting investment tax credits for capital projects that reduce emissions, and developing a long-term trade infrastructure plan. The report argued that these measures will help Canada utilize its natural wealth and strengthen its economy.
The report will inform discussions during the Canadian Chamber’s five-city speaking tour. Experts will explore how Canada’s natural resources can meet global demands, foster Indigenous reconciliation, and drive economic growth for the benefit of all Canadians.