The International Monetary Fund joined the many critics of Canada’s flagging ability to generate wealth, saying “weak business dynamism, slow capital deepening and lagging innovation” limit the country’s ability to generate growth over the longer term. (The Logic)

Talking point: The comments on productivity came amid many others in a statement on what IMF staff learned in meetings with Canadian officials at the end of November and early December. The report described Canada’s short-term prospects as “subdued” and risks as tilted “to the downside,” mostly because of U.S. tariffs. They endorsed the main elements of Prime Minister Mark Carney’s budget, but suggested that Ottawa implement “strong guardrails” to keep industrial policy from becoming a lifeline for legacy industry and zombie firms. The assessment suggested that the productivity problem is rooted in a lack of competition, especially in “key service industries.”