National attention is understandably focused on the Trump administration’s moves towards imposing 25 per cent taxes on imports from Canada and Mexico. Regardless of how this plays out, the situation marks a fundamental shift in the trade status quo at a time when Canadians continue to feel squeezed due to inflation and other economic factors.

We can speculate as to why the United States is disrupting its longstanding trade relationship with Canada, but I’d suggest that we should use this crisis as an opportunity to champion a strategic and long-term “Made in Canada” plan to lower prices and enhance productivity with pro-growth policies.

Canada is currently grappling with a significant productivity problem. From 2000 to 2024, labour productivity increased at an annual rate of 0.8 per cent, less than half the average annual pace (1.9 per cent) observed in the United States, as reported by Statistics Canada . And Canada’s growth in GDP per capita has been declining sharply relative to a larger group of peer countries: for the period from 2014 to 2022, Canada’s average GDP growth ranked lowest among 30 OECD countries, according to the Fraser Institute .

We can address this challenge and improve productivity by focusing less on free trade with the U.S. and more on free trade within Canada It should not be the case that interprovincial trade barriers make it more difficult to buy goods from another province than from the U.S.

The removal of interprovincial trade barriers could yield substantial benefits. According to Anita Anand, Minister of Internal Trade, scrapping existing barriers could lower prices by up to 15 per cent, enhance productivity by up to 7 per cent, and inject an impressive $200 billion into our domestic economy.

There is a crucial link between labour productivity and investment in capital and innovation. Canada is lagging on both dimensions. According to the C.D. Howe Institute , Canadian workers were projected to receive only 55 cents of capital investment for every dollar awarded to their U.S. counterparts in 2024. And Canada lags in spending on R&D , with a virtually flat level of spending over a long period of time compared to moderate to high levels of spending growth in many other countries. We need a policy framework that encourages more of this kind of investment.

As well, to create a more competitive environment, we should embrace a philosophy of "less is more," starting with a simplified tax structure – Canada’s sprawling 3,000-page tax code needs a comprehensive overhaul. We also have the opportunity to reduce red tape, and we have a tangible example with British Columbia, which reduced regulations by 47 per cent between 2001 and 2017.

In this era of seemingly permanent changes to economic norms, we have a unique opportunity to accelerate our productivity and ultimately boost prosperity for all Canadians. Canada should use this moment to get our house in order rather than focus exclusively on external factors.