CALGARY — Economists, business lobbyists and policymakers past and present gathered this week in Calgary to discuss the pressing issue of Canada’s productivity crisis.

The mood at the BMO Centre in Stampede Park was suitably glum, given the metrics. Canada’s per-person economic output has failed to keep up with those of its peers, and attendees of the University of Calgary event grappled with how the country ended up here—and what it can do to arrest its downward spiral. 

Show me the money: The country’s failure to produce wealth efficiently is most clearly expressed in flatlining investment levels, several panellists said, fed by a broader private sector reluctance to make risky bets. 

“Capital isn’t just scared, capital is paranoid,” said John Manley, who served as Canada’s industry minister starting in the late 1990s, when the Liberal government was working to reduce out-of-control public debt.

Noting that “investment only flows where it feels it’s welcome,” Manley said Canada has not positioned itself as a safe place to park capital.

Here, in the judgment of other speakers at the summit, are a few reasons why:

• Tech hesitancy: Canada’s private sector has long been slow to integrate new technologies like AI. Nicole Janssen, the CEO of AI consultancy AltaML, said it takes an average of around four months for the company to sell its services to U.S. companies, and just one week for those based in the United Arab Emirates. In Canada the process takes 18 months. 

“That is a massive problem, and until we get this technology adopted, it doesn’t return any value to us as a country,” she said.

• Overregulation: Alberta Premier Danielle Smith, voicing a position shared by many at the event, said excessive controls over everything from major project approvals to interprovincial trade have put a chokehold on productivity. 

“There are too many regulatory roadblocks and too much red tape, too many barriers to the free movement of goods and services,” she said.

• Slow public-sector procurement: The federal government’s procurement system is weighed down by layers of bureaucracy, and as a result fails to keep pace with the private sector’s needs, said Alejandro Adem, president of the Natural Sciences and Engineering Research Council. Case in point: procurement contracts stall every summer because vacationing Treasury Board officials aren’t around to approve them. 

“This government is not designed for the real world,” Adem said. 

Solutions, anyone? While the data is clear—RBC analysts estimate Canada’s annual productivity gap with the U.S. has widened to $20,000 per person—solutions to the problem are less obvious. 

Manley said governments need to “stay in [their] lane” and stop getting in the way of the private sector. Dwight Duncan, the former deputy premier of Ontario, said Canada could embark on something resembling the Macdonald Commission, a landmark study in the 1980s that helped unify and establish Canada’s position on free trade.

“It has to begin by building a consensus,” he said.