If Canada wants to compete with the US, it might need to follow the Americans’ playbook.
That’s according to Council of Canadian Innovators Chair Jim Balsillie, who spoke about the importance of reorienting Canada’s regulatory environment to facilitate greater sovereignty during BetaKit’s Most Ambitious: Town Hall on Monday.
“Wealth, power, and security are rooted in the ownership and control of intangible assets.”
During a presentation and fireside chat with BetaKit editor-in-chief Douglas Soltys, Balsillie made the case that Canada has missed the boat on one of the most important economic shifts of recent memory: the change from a global economy rooted in tangible assets like resource development and manufacturing to intangible assets like intellectual property, AI, and data.
“Wealth, power, and security are rooted in the ownership and control of intangible assets,” Balsillie told the crowd at Toronto’s TIFF Lightbox. “Today [intangible assets] dominate, comprising 92 percent of the S&P 500’s $55-trillion value.”
While the US and Canada’s European peers have leveraged their economic policy to reflect this shift, Canada has languished in a bygone era, Balsillie said.
He pointed to the fact that Canada is projected by the OECD to have the lowest growth in gross domestic production (GDP) per capita among advanced economies over the coming decades.
Instead, Balsille argued that regulators are “suffocating capital” by prioritizing more traditionally stable investments and not taking risks on tech.
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He argued that in order to be independent of the US, Canada must start adopting some US-style policy.
“The US consistently advances its interest through coordinated policy instruments,” he said, citing the US AI Action Plan, GENIUS Act for digital currencies, tariff policy, and others as examples of economic statecraft.
“These are not isolated, disparate initiatives, but rather part of a coherent policy framework to enhance US economic and security dominance, globally,” he added.
Balsillie explained how Canada has diverged from the US over the past several decades of intangible asset development, saying that while the US has turbocharged its capture of “intangible value,” Canada has lost global GDP share.
“You guys have done what you’ve done with the wind at your face. Imagine if you had the wind at your back.”
“Had we kept pace with the US growth over the past 15 years, Canada would generate roughly a trillion dollars more in national income per year,” he said.
Balsillie’s thoughts on US-Canadian policy disparity led to a conversation about how Canada’s business community might help bring about a reorientation.
“We need a capacity for the realities of this century and [the business community] needs to join up and make it politically attractive to work with you, and very penalizing not to work with you,” Balsillie said. “There’s nothing to say it couldn’t be fixed, and we could see the orientation starting this June.
“This is an optimistic vision that presents a tremendous opportunity for entrepreneurs and investors in this room. If we seize it,” he said.
Balsillie added that as he sees it, entrepreneurs have been facing enormous headwinds, but if founders band together, they could be a powerful lobbying force.
“You all need to join up and make it politically attractive to work with you and make it penalizing not to work with you … you guys have done what you’ve done with the wind at your face. Imagine if you had the wind at your back,” he said.
A complete set of Balsillie’s slide deck from the presentation can be found below.
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Feature image courtesy Lilac for BetaKit.