Marion Sees Canada on the Verge of Investment Surge

Canada's National Bank Financial chief economist Stéfane Marion is optimistic about the country's growth prospects, despite decelerating population gains and intensifying trade tensions with the US.

In a recent speech at the Bloomberg Canadian Finance Conference in New York, Marion acknowledged these challenges but argued that Canada is poised for a significant investment surge. He pointed to Prime Minister Mark Carney's agenda as a key factor, which includes advancing major projects, streamlining regulations, lowering taxes, and boosting competition.

Marion expects foreign capital to flow into the country, driven by its low-cost natural resources such as natural gas and electricity, which will be in high demand due to artificial intelligence. He also anticipates that the US-Canada trading relationship will endure, with Canada playing a key role in helping other countries keep costs under control.

The economist noted that foreign buyers have already snapped up record amounts of Canadian government bonds, but he sees the real opportunity in long-horizon money flowing directly into businesses and projects. He highlighted recent measures by Carney to cut federal permit reviews to one year and limit exposure to labor strife as a positive step.

Marion also tied a decade of underinvestment to deeper regional tensions, arguing that recent policies could temper separatist pressures in provinces like Alberta and Quebec. However, he warned that stronger investment could lift demand and inflation pressures, which may lead the Bank of Canada to raise interest rates next year.