INDU meeting 8 · 2025-10-20 — Committee Evidence — LegisWatch

Summary

The House of Commons Standing Committee on Industry and Technology (INDU) met on October 20, 2025, to study Canada’s productivity and economic competitiveness. Witnesses included Dawn Desjardins (Chief Economist, Deloitte), Linda Hasenfratz (Executive Chair, Linamar Corporation), Alexa Young (Vice-President, Government Relations and External Affairs, Vancouver Fraser Port Authority), Jim Jarrell (CEO and President, Linamar Corporation), Mark Stoddart (CTO and Executive Vice-President, Linamar Corporation), Chad Bayne (Partner, Osler’s Emerging and High Growth Companies Group, as an individual), Mark McQueen (Founder, Wellington Growth Partners Inc., as an individual), Gideon Hayden (Managing Partner, Leaders Fund), and David Stein (Co-Founder and Managing Partner, Leaders Fund).

Dawn Desjardins said Canada’s productivity gap with the U.S. has widened to about 71% over 40 years, driven by low investment in machinery, slow technology adoption, and regulatory hurdles. She recommended phasing out interprovincial trade barriers, which she said could add $881 billion in economic output by 2040, and targeting immigration and accelerated trades programs to bring half a million workers into construction. She also noted that AI adoption could add $300 billion to GDP over a decade but warned it may displace mid-skill jobs.

Linda Hasenfratz argued that Canada’s business productivity is actually growing, but is diluted in aggregate figures by stagnant government and non-profit sector output. She said manufacturing productivity has grown twice as fast as the U.S. over 15 years, and that Linamar’s Canadian plants are its most productive globally. She recommended cutting government and non-profit workers by 35% to move them into revenue-generating roles, and promoting innovation through targeted incentives, lower corporate taxes, and reduced red tape.

Alexa Young said the Port of Vancouver moved a record 158 million metric tons of cargo in 2024, contributing $16 billion to GDP and supporting 132,000 jobs. She recommended reducing red tape through expanded use of substitution agreements and permitting powers, and urged the government to swiftly launch the promised $5-billion trade diversification corridor fund to build port capacity and resilience.

Jim Jarrell and Mark Stoddart emphasized that Linamar’s productivity is driven by a culture of continuous improvement, with Canadian plants achieving 54% value-added sales growth per employee over 10 years. They called for a national manufacturing strategy focused on clustering, local sourcing, and faster regulatory approvals for R&D incentives, noting that processes in countries like France and Germany are more streamlined than Canada’s.

Chad Bayne traced the decline of Canada’s tech sector from the Ottawa corridor’s heyday, arguing that government-funded primary research catalyzed past successes like Nortel and Shopify. He said the capital gains tax change created a backlash among entrepreneurs, and recommended a review of how government prioritizes spending to better support domestic tech companies rather than foreign firms.

Mark McQueen said Canada’s innovation economy suffers from a lack of growth capital, with U.S. venture investment 22 times higher per capita. He recommended creating an angel tax credit, privatizing the Business Development Bank of Canada to spur competition, and allowing flow-through shares for tech start-ups, similar to mining. He disagreed with the current approach of giving large subsidies to foreign automakers.

Gideon Hayden and David Stein presented a study showing that Canadian-founded start-ups are increasingly leaving the country, with only 30% started in Canada in 2024, down from 70% in 2015-2020. They recommended eliminating capital gains taxes for tech start-ups, accelerating skilled worker visas, and providing tax credits for businesses that buy Canadian technology. They disagreed with the effectiveness of existing programs like SR and ED, calling for faster approvals and less red tape.

The committee briefly debated a procedural point about distributing documents in both official languages, with a member reminding colleagues to send materials to the clerk for translation before circulation.

AI-generated summary — may contain errors; verify against the official evidence.

Witnesses · 9

Dawn Desjardins

Chief Economist, Deloitte

Opening remarks

Thank you so much for inviting me to speak to your committee. I know previous witnesses have presented the challenges about Canada's productivity. As an economist, I think of productivity as how much is being produced per hour worked, or how capital and labour combined with factors like technological progress, economies of scale and organizational innovation produce goods and services. It's well known that Canada's productivity performance has deteriorated, and our country has failed to keep up with most of our trading partners. Over the past 40 years, the gap between what Canada produces per hour and what the U.S. achieves has gone from about 88% to something like 71%. There are many reasons for this underperformance, from the relative lack of investment in machinery and equipment per worker to a mismatch between workers and jobs and slow adoption of a technology. The composition of our economy, which relies on small and medium-sized enterprises, may also have contributed to this lower productivity. High levels of taxation, a complicated system to access government incentives and regulatory hurdles are some of the often-cited impediments to business investment. We know…

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Linda Hasenfratz

Executive Chair, Linamar Corporation

Opening remarks

Thank you so much. I think a lot of elements of productivity are in general not well understood. I want to talk a little bit about that this morning. I think there are three things you all need to really understand about productivity in Canada. First, business productivity in Canada is in fact growing. We are diluted in the aggregate figure by growing ranks of government and not-for-profit workers in our overall calculation. The second key point is that Canada's overall productivity is pretty much aligned with that of most other advanced economies in the G7 and countries in the EU. Finally, although Canada does lag behind the U.S. on overall productivity, partially for the reasons I've just said, we don't lag in every sector. In fact, we are growing productivity faster than the U.S. in several sectors, including, importantly, manufacturing as well as financial services and transportation. When most people hear that Canada's productivity isn't growing, they think it's business productivity that isn't growing, but in fact business productivity has grown 50% over the last 25 years. Offsetting that is the productivity of the non-business sector, government workers and…

Chad Bayne

Partner, Founder & Co-Chair, Osler’s Emerging and High Growth Companies Group, As an Individual

Opening remarks

Thank you, Mr. Chair. Good afternoon. I am honoured to have the opportunity to participate in this committee meeting. My name is Chad Bayne. I am a partner at Osler, Hoskin and Harcourt LLP, a national business law firm with its headquarters in Toronto. I also founded and co-chair the firm's emerging and high-growth companies practice, where we work with start-up and scale-up companies from the ideation stage to the late stage and everything in between. Please note that I am appearing in front of this committee in my personal capacity, and the views I express here today are my own and do not necessarily reflect the views of my firm. Before becoming a lawyer, I was a computer engineer. I graduated from the University of Waterloo and worked primarily for Newbridge Networks in Kanata doing a combination of software, hardware and chip design. Between that and my current career as a lawyer, I have been involved in Canada's tech sector for over 30 years. Growing up in Kanata, just a stone's throw from here, in the 1980s and 1990s, I witnessed the true potential of the Canadian tech sector with global giants like my employer, Newbridge, as well as Nortel, Cognos, Corel and JDS, to…

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