During the Second World War, hundreds of professionals decamped to Ottawa to help C.D. Howe, the munitions and supply minister, create an industrialized economy from a standing start.

Howe saw Canada as the “second front line.” The battle was turning a weak and backward economy into one that could provide for the soldiers at the actual front. Before 1939, “Canadian industry had never made a tank, a combat airplane or a modern, high-calibre, rapid-fire gun,” Fortune magazine observed in 1945. By the end of the war, Canada was the world’s fourth-biggest producer of war supplies behind the U.S., the U.K. and the Soviet Union. “The speed with which industry was organized and production started ranks as an industrial miracle,” Fortune raved.

The corporate mercenaries worked for token wages, albeit while collecting their professional salaries. Howe said their willingness to “sacrifice personal gain to serve their country” represented “one of the sources of the inherent strength of Canada as a nation.” Howe’s boss, William Lyon Mackenzie King, thought that was a bit much. Heaping praise on the ringers that Howe drafted “shows a curious lack of proportion,” considering the greater number of public servants who also contributed, King wrote in his diary. 

It’s possible the mandarins would have overhauled the economy on their own, but unlikely, historian Allan Levine concludes in The Dollar a Year Men, his 2025 book on a rare moment when Ottawa and corporate Canada were simpatico. He also doubts that we’ll ever see anything like it again. “Given the widespread mistrust of government today and the self-centred world we live in, it is difficult to imagine a similar collective response if Canada were to face the same kind of danger,” Levine writes. 

There are loud echoes today from Howe’s time. Canada isn’t in danger like it was in 1939, but nor are we safe. Ray Dalio, the founder of Bridgewater Associates, one of the world’s biggest hedge funds, describes the current situation as a “world war” characterized by smaller, interrelated conflicts rather than a clash of great powers. There’s nowhere to hide in such a world. 

As in the 1930s, Canada’s economy isn’t ready for the rigours of a dangerous, unpredictable world. RBC Thought Leadership, the in-house think tank at Canada’s biggest bank, this week estimated that simply muddling along in six strategic areas—oil and gas, electricity, critical minerals, defence, space and food—will require investment of some $1.1 trillion over the next decade. 

Like Howe, Carney intends to deploy the power of the state to accelerate an economic turnaround. Also like Howe, he lacks confidence that the public service can keep up. Carney’s chief of staff, Treasury Board boss and U.S. ambassador were all business heavyweights. He also appointed a former pipeline CEO to lead his new Major Projects Office and a former banker to lead his new defence procurement agency. The November budget said the government had an “immediate-term goal” of recruiting 50 “external leaders in technology, finance, science and other sectors.” 

The authors of the RBC study think Canada should strive to do more than muddle along. They put the cost of a “step change”—two new oil pipelines instead of none, for example—at $1.8 trillion. The problem is that corporate Canada doesn’t really do step change anymore. As the report notes, the non-financial corporate sector is sitting on more than $1 trillion of cash, a pile that Carney once called “dead money.” 

Carney made that jibe in 2012 when he was Bank of Canada governor. The persistence of the hoard shows that the corporate class doesn’t shame easily. It also hints at Levine’s skepticism about our willingness to curb material want to support something bigger than ourselves. The characterization of shelter and food inflation as a national crisis because an otherwise comfortable middle class feels poorer is another example. So is Canadian Natural Resources Limited’s decision to pause its Jackpine expansion, undermining Canada’s pitch as a reliable source of supply for countries who want to diversify away from the Middle East.      

History doesn’t repeat, it teaches. One lesson of the 1940s is that a tight, top-down collaboration between government and business can bring about the sort of step change that thinkers at RBC imagine. But that doesn’t mean a biography of Howe is a template for ending Canada’s economic drift. The federal bureaucracy has since added over eight decades of rules and norms and layers, making it a very different entity than the one Howe forcibly fused with private sector derring-do. 

The spirit of patriotism that inspired so many corporate sacrifices also is missing. Levine told me in an interview that many of the people he wrote about were formed by the First World War, an existential threat of a kind that no native-born Canadian adult has ever faced. “The desperation and the urgency is not there [today].” 

Indeed. The recruitment of 50 skilled outsiders might be an immediate-term goal, but only if your definition of immediate extends beyond five months. A Treasury Board spokesperson said in an email that nothing has happened on that file since it was announced in November. 

The same goes for corporate leaders. More are talking in patriotic terms, but almost always with a lack of commitment. RBC chief executive Dave McKay said last week that Canada is in a “once-in-a-generation moment” and that the bank “intends” to help accelerate economic growth by deploying “up to $1 billion over the coming years” to help companies scale in Canada.

RBC turned down The Logic’s requests to learn more about McKay’s intentions. So what we know today is that the response of a ridiculously profitable bank to a generational moment is to (maybe) mete out about five per cent of its 2025 net income to promising companies.

That’s not a step change. That’s a bank doing a smidge more banking.  

Kevin Carmichael is The Logic’s economics columnist and editor-at-large. He has spent more than two decades covering economics, business and finance for outlets including Bloomberg News, The Globe and Mail and the Financial Post, where he also served as editor-in-chief.