Key points

• Business investment has been languishing in Canada for more than a decade.
• The Canada Investment Summit is the latest attempt to provide a jolt. 
• While foreign inflows have turned higher, a meaningful turnaround in ‘on the ground’ capital investment in Canada will take time.

“We are building a stronger economy with an ambitious plan to catalyze $1 trillion in total investment in Canada over the next five years."

— Prime Minister Mark Carney, April 17, 2026, announcing the inaugural Canada Investment Summit

Canada is hosting a two-day Investment Summit (September 14–15 in Toronto) with the goal of reigniting investment in Canada after years of weak performance. The plan is to capitalize on Canada’s status as a safe and reliable exporter to the world in this period of geopolitical instability.

The summit aims to attract private debt and equity to support the federal government's target of $1 trillion of investment in Canada over the next five years. By bringing together government leaders, Indigenous business partners, and international institutional investors, the plan is to match private capital with domestic growth priorities.

Correct problem identified

A natural question is whether this is the right problem to focus on. Our view is yes.

We have long maintained that Canada’s struggling GDP per person is at its core an investment problem. To see why, note that per capita business investment remains well below the 2014 peak. Other components of GDP—like household consumption and government spending—have been doing the heavy lifting of driving growth in Canada.  Exports are lagging too, but we see this as related to investment. Without investment in new production facilities and transportation infrastructure, how will exports rebound?

Canada’s consumption-driven growth is not sustainable. The population is no longer growing, consumers face elevated debt levels and rising energy costs, and government debt levels are rising.

Building productive assets in Canada is a critical step (but not the only step) toward driving the next leg of productivity and economic growth in Canada.

Fixing it will take time

Admitting there’s a problem is the first step. Fixing it is harder and will take time. Note that reigniting investment has been the game plan for well over a year. Yet, through the first half of 2026, real business investment in non-residential structures and machinery and equipment has been flat (-0.5%) compared to the same time last year. In the second quarter, investment bounced back, but it is still below levels from the second quarter of 2023. Other factors, namely tariffs and trade uncertainty, are weighing on investment. These external hurdles will need to be overcome to hit Canada’s investment goals.

A cornerstone of the plan is to fast-track major projects. So far, 18 projects have been referred to the federal government’s Major Projects Office. Fast-tracking these select projects is a positive step, but ultimately it will need to be easier for all projects to navigate the regulatory system.

Another positive step is the “Productivity Mega Deduction” announced at the summit today by the PM. The tax incentive will increase the amount of assets covered from roughly 15% to more than 65%, including fibre-optic cable, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft and vehicles, patents, rail track, bridges, and roads.  

Glimmer of hope?

Canada has a limited pool of domestic investors. Foreign investment will be needed to catalyze this level of investment.

The good news is that foreign direct investment (FDI) inflows have picked up in the last two years.

The caution, however, is that most of this has been in the form of mergers and acquisitions. This can be a positive sign of improving investor sentiment toward Canada. But, as the C.D. Howe Institute points out, this doesn’t necessarily translate into new investment in Canada in plants, equipment and intellectual property. Ultimately, it is ‘on the ground’ investment that is needed to move the needle on productivity in Canada.

It’s too early to say what 2026 will bring. In the first half, FDI into Canada is trending below levels from the same time in 2025. The quarterly data are choppy, and the second half could yield much stronger results. The point is that a sustainable turnaround will take time.

Bottom Line: Canada is correct to focus on bringing back investment. This summit and efforts to accelerate major projects are important steps down that road as is the Productivity Mega Deduction.

But it’s a long journey. Ultimately, foreign investors will need to be convinced by execution, not just plans, that major projects can be completed in Canada.  

Answer to the previous trivia question: The 2026 FIBA Women's Basketball World Cup was held in Berlin, Germany.

Today’s trivia question: Which country won the 2026 FIBA Women's Basketball World Cup?