Can the Canadian economy be fixed?

Back in June, Transport Canada published Transportation in Canada 2025, an annual report to Parliament on the state of transportation in the country that is mandated by Subsection 52(1) of the Canada Transportation Act. This one went more or less ignored until this week, when Charles Lammam of the Montreal Economic Institute read the document and wrote it up, observing that the section on structural challenges “reads like a confession.”

Transport Canada has a lot to confess. Canada’s transportation sector has recorded the worst total factor productivity growth in the G7 over the past quarter century, and the report does not expect that to change in the coming decade. Roughly eight per cent of global container terminal capacity is now partially automated; Canada’s share is effectively nil, which the report concedes leaves us unable “to compete with high-efficiency global gateways.” Regulatory requirements affecting transportation have risen substantially since 2006. Since 1981, the economy has grown about one and a half times faster than investment in the infrastructure that moves it.

None of this is news to the minister. In late March, at an Empire Club lunch at the Royal York, Transport minister Steven MacKinnon told a Bay Street audience that Canada has “deep and structural problems” in transportation: “We’re not modern enough. We’re too bureaucratic. We haven’t invested enough in our infrastructure. Other countries find us unreliable.” Paul Wells, one of the very few journalists in this country who pays attention to these things, watched the speech and interviewed MacKinnon afterward. In his write-up, Wells reported the minister’s own accounting of the damage: sixteen significant labour disruptions in the sector since 2019, with the CN and CPKC shutdown alone costing something like $340 million a day. MacKinnon added, without being prompted, that he was labour minister through much of it.

Wells also supplies the relevant history, and it is dispiriting. Ottawa launched a Ports Modernization Review in 2018. Reform legislation, Bill C-33, arrived roughly five years later. It was reported back from committee in the fall of 2024 and then died on the order paper when the 2025 election was called. In April, MacKinnon told Wells that new measures were coming in “late spring,” some of them requiring legislation, though he declined to discuss the form, shape or colour.

It is now the middle of August, which is certainly late spring, if it is still spring at all.

This is such a consistent pattern in this country there ought to be a Heritage Minute about it. Eight years of official attention to the ports file has produced one dead bill and a series of increasingly candid descriptions of the problem. The constraint has never been that Ottawa does not understand what is wrong, it is that understanding is where the process inevitably terminates.

Consider the automation paragraph, which is the one place the report explicitly indicts the actions of the government rather than, like, vibes. Canada’s missing automated port capacity is not just one of those things, like bad weather. Automation and manning levels were the central issue in the dispute between the BC Maritime Employers Association and ILWU Local 514. That dispute produced the November 2024 lockout, and MacKinnon, then labour minister, ended it by invoking section 107 of the Canada Labour Code and imposing binding arbitration.

It is striking to note that the new Transport Canada report lists that intervention among the year’s bright spots: binding arbitration “helped provide improved labour stability in other critical parts of the network,” it says. Yet two pages later the report laments the absence of the automated capacity that the dispute was about, without drawing the obvious connection: Binding arbitration buys labour peace, and the price shows up in the productivity chart.

The Ready-Rogers Industrial Inquiry Commission was commissioned in 2024 as a response to labour disputes in B.C. ports, with the mandate to “make inquiries into the cause of ongoing labour instability in the B.C. ports and to recommend structural changes to facilitate the free collective bargaining process.” It reported to MacKinnon in May 2025, and proposed a mechanism that would preserve the right to strike, create a statutory special mediator process, and restructure bargaining so that automation can be negotiated rather than deferred. Fifteen months on, that too is a document without action.

Budget 2025 commits Canada to doubling overseas trade by 2035. The Trade Diversification Corridors Fund and the Arctic Infrastructure Fund are meant to get us there. Both presume functioning transportation gateways the department’s own report admits do not exist.

MacKinnon told Wells that transport was his dream job, because “I like it when things work.” That is a better standard than most ministers set for themselves, and there is no reason to doubt he means it. But it is precisely this sort of thing that makes us despair of ever getting at the heart of what ails the Canadian economy.

In 2025 an external tariff shock pushed Canada to try again at dismantling its long-standing internal economic borders. For a rare moment, political will formed quickly, the file dominated headlines, and it seemed as if this was finally it — the internal Canadian market would unify.

Ottawa, to its credit, seized the moment and moved quickly on the file: Bill C-5 set up federal mutual recognition and removed all 53 federal exceptions to the Canadian Free Trade Agreement^.. Then, unfortunately, the file stalled. The provinces ran late on their own deadline to open direct-to-consumer alcohol sales, and Minister Dominic LeBlanc has conceded that the year-end goals may not be reached.^. It really seems that political and public attention has moved on.

For followers of the file, this is frustrating. Unifying the national economy is of utmost importance to unleash the Canadian free market, and author Wayne Pommen and Build Canada have put forward a new memo that proposes to put real federal money behind provincial reform with cash incentives for removing barriers.

We cannot dream of building a global economic powerhouse if there are ten segmented markets each acting in their own interest on regulation. If we wish to see our nation thrive, we must ensure the full Canadian market is available to all Canadians – both in labour supply and access to buyers.

Rob Khazzam, the co-founder and CEO of Float Financial, talks about what it takes to build something that changes not just industries, but economies.

Aug 16: On this day in 1896, gold was discovered near the Klondike River in Yukon, triggering one of history’s greatest gold rushes and permanently transforming Canada’s remote northwest.

Aug 16: In 1812, Isaac Brock and Tecumseh took Detroit: 2,188 Americans captured, seven killed, no British losses. It cost the Americans an entire army and halted the planned invasion of Canada, the essential part of their war strategy.

Aug 18: The Ogdensburg Declaration, agreed to in a rail car by Mackenzie King and Franklin D. Roosevelt, established the Permanent Joint Board on Defense to oversee the collective defence of the north half of the Western Hemisphere.

Aug 19: On this day in 1942, Canadian forces led the Dieppe Raid. Designed to gain experience and test the equipment needed for D-Day, the Canadians paid a heavy price: There were 3,367 casualties, including 1,946 prisoners of war; 916 Canadians lost their lives.

Aug 20: The Imperial Economic Conference closed in Ottawa on this day in 1932. Chaired by R.B. Bennett, it proposed a zone of low tariffs inside the Empire behind high tariffs against everyone else — “home producers first, empire producers second, and foreign producers last.” This was Canada’s last serious attempt to diversify away from the American market by political will.

Aug 21: Canada’s largest recorded earthquake, magnitude 8.1, struck off Haida Gwaii at 8:01 p.m. PDT on the Queen Charlotte Fault, on this day in 1949. It was felt across BC, Alberta, Yukon, Washington, Oregon and Alaska, with no deaths.

Joe Fafard was born September 2, 1942 at Ste. Marthe, Saskatchewan, a small agricultural community, to French-Canadian parents. He took a BFA at the University of Manitoba (1966) and an MFA at Pennsylvania State (1968), then taught sculpture at the University of Saskatchewan’s Regina campus from 1968 to 1974. Contact with the California ceramicist David Gilhooly pushed him toward his own experience as subject matter, and he began making figurative sculptures of the people around him along with the cows that became his signature.

He worked in ceramic and later bronze, casting at his own foundry in Pense. His subjects ranged from fellow artists, including Picasso and the Saskatchewan painter Jan Wyers, to politicians such as Pierre Trudeau and Tommy Douglas. The National Gallery installed his Running Horses (2007) at its Sussex Drive entrance in 2011. He died of stomach cancer at his home outside Lumsden on March 16, 2019, aged 76.

• As a corrective to a lot of the recent hype, Trevor Tombe argues in the Hub that the Canadian economy is not, actually, on fire. And it looks like Quebec and Newfoundland are close to a deal on Churchill Falls.

• The CAF held a drone testing showcase event at a NATO range in the Ottawa Valley this week. And Canada is looking to acquire a long-range strike system that has proven effective in the Ukraine war.

• It’s going to be a busy weekend for Canadian trade negotiators in Washington. Canadians are in a fighting mood, and many want illegal firearms from the US to be on the negotiating table.

• What has 448 wheels and is currently crawling between Edmonton and Fort Saskatchewan? A de-ethanizer!

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