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Is there a bull case for Canada?

Canada stands at a crossroads. With an economy rich in natural resources—third-largest oil reserves, world-leading potash production, vast uranium deposits, and 20% of the world’s freshwater—Canada has an unprecedented opportunity to capitalize on its strengths. However, recent economic trends show that rather than investing in long-term productivity and diversification, Canada has relied on rapid population growth to drive GDP, leading to declining GDP per capita and worsening affordability for younger generations.

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The Resource Advantage

Canada’s natural wealth has long supported economic stability, with industries like oil, gas, mining, and forestry driving exports and job creation. However, merely extracting and exporting raw materials limits long-term prosperity. To create sustainable growth, Canada must shift towards value-added industries that refine, process, and utilize these resources domestically. This means investing in AI-driven data centers, clean energy, advanced manufacturing, and critical mineral processing to ensure that natural resources fuel high-value sectors rather than just being shipped abroad.


One of Canada’s most overlooked advantages is its cool climate and abundant energy, making it an ideal location for AI data centers, which require significant power and cooling. As global demand for computing surges, Canada has a chance to position itself as the “Silicon Valley” of AI infrastructure. Similarly, the global shift toward renewable energy places Canada’s uranium, hydroelectric power, and emerging hydrogen industry at the center of the clean energy revolution.




The Pitfalls of Population-Driven Growth

Despite Canada’s immense economic potential, GDP per capita has been declining, meaning that while the economy grows in absolute terms, individual Canadians are getting poorer. This is because economic growth has been driven by record-high immigration and population expansion rather than investments in capital and productivity. Canada added over a million people in 2023, but without an equal rise in infrastructure, housing, and job opportunities, the result has been skyrocketing housing costs and strained public services.


The real solution lies in capital expenditures (CAPEX) and innovation—investing in infrastructure, modernizing industries, and ensuring that workers have access to technology and training that boost productivity. Currently, Canada is falling behind, with business investment per worker lagging behind other developed nations. Without a strategic shift toward investment-led growth, Canada risks becoming a country where more people compete for fewer opportunities, leading to lower living standards.


The Path Forward

For Canada to fulfill its economic potential, policymakers and investors must focus on diversification, productivity, and infrastructure investment. This means:

  • Strengthening high-value industries like AI data centers, electric vehicle manufacturing, and clean energy.

  • Investing in infrastructure—transportation, utilities, and digital networks to support economic growth.

  • Boosting R&D and skills training to ensure Canadian workers can participate in high-tech industries.

  • Encouraging private investment through tax incentives and competitive business policies.


Canada is at a pivotal moment. If it continues relying solely on population growth to drive GDP, the country risks long-term economic stagnation. However, by strategically leveraging its vast natural resources, investing in CAPEX, and fostering innovation, Canada can build a prosperous, diversified economy that benefits both current and future generations. For investors, this presents a massive opportunity: those who recognize Canada’s long-term potential and invest in its transformation today will be well-positioned for the growth ahead.

 
 
 

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