Canada's New Growth Phase Driven by Productivity Gains

Canada is entering a new phase of growth, driven by productivity gains and higher investment, according to Morgan Stanley. The country's large pension assets, valued at approximately $2.4 trillion, provide ample capital for domestic projects. However, policymakers face the challenge of making these projects attractive enough to investors on a risk-adjusted basis.

The emerging policy regime aims to lower the after-tax cost of investment and shorten approval and construction timelines, reducing project-specific risk for private investors. Canada's resources, including hydrocarbons, hydroelectricity, uranium, copper, nickel, lithium, and potash, are abundant and in high demand for a new global compute cycle.

A growing base of infrastructure, power, and resource capacity is expected to support expansion across the broader economy. Investment is already underway in sectors such as utilities, transportation, mining, and energy, which account for 61% of planned 2026 capital expenditures.