Ottawa Seeks to Unlock Billions for Local Wealth Building

Canada's economy is facing a new crisis, one in which the country must decide how to allocate its investments. Mark Carney, the Governor of the Bank of Canada, is working to strengthen the nation's economic sovereignty and diversify its trade away from the US. He believes that Canadians need more options for directing their investments back into their own communities.

Statistics Canada estimates that Canadian financial assets total $11.95 trillion, with about 35% or $4.18 trillion invested in personal investments such as stocks, bonds, mutual funds, and ETFs. However, only a small portion of this money is building productive capacity in Canada, with the rest invested outside the country.

The Canadian Coalition for Community Capital advocates that the federal government use tax incentives to encourage Canadians to invest in community bonds and cooperative shares. This could unlock $42 billion in new investment, according to research by Corporate Knights. To achieve this, Ottawa can take five key steps: opening up tax-advantaged savings accounts, sharing some of the risk of local investing, incentivizing community finance, giving co-ops more reach, and building the necessary supports.