Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
Breaking Canada’s Productivity Trap For Stronger Growth
Bank of Canada | Speech | Nov 20, 2025
Image: OECD via Haver Analytics and Bank of Canada 2023
Bank of Canada Calls For Action To Fix Canada’s Productivity
On November 19 2025, the Bank of Canada (BoC) released a speech, 'Toward a virtuous circle for productivity' delivered by Nicolas Vincent the external Deputy Governor at a recent event of the Association des économistes québécois (ASDEQ) together with CFA Québec.
See: BoC’s Carolyn Rogers Calls Banks an Oligopoly
His talk explains the pattern of Canada's long standing productivity challenges and sets out what needs to change. Canada has lived with the same productivity problem for a generation. Growth has slowed, investment has weakened, and the country has become more exposed to global shocks.
Key Takeaways
Weak productivity discourages investment, and weak investment keeps productivity low.
Regulatory and competitive conditions are central to improving that pattern.
Training, mobility, and credential recognition must work better to support new technology.
- Status quo isn't acceptable as keeping the current environment in place would lock in today’s slow growth.
Vincent captures the situation clear:
“To put it bluntly, we’re stuck in a vicious circle.”
He notes that productivity grew about 3% in the 1960s and 1970s but fell to roughly 1% between 2000 and 2019. When productivity is weak, wage gains soften and demand becomes fragile. Then companies hesitate to invest in new tools or equipment, and that hesitation feeds right back into weaker productivity.
He highlights 3 things that need to change the trajectory (not a quick fix)
1. Strengthening The Investment Environment
The investment climate is paramount for firms trying to modernize. One of the clearest lines in his speech addresses the barrier businesses often describe:
“Businesses often tell us that Canada’s regulatory framework is too cumbersome, complex and far-reaching.”
A stronger investment climate means faster decisions, clearer expectations, and fewer overlapping rules. That allows companies to move ahead with projects that raise productivity instead of delaying them.
See: Why AI Investment Is Missing What Workers Actually Want
In fintech, it's especially important because licensing decisions, compliance approvals, and inter-provincial regulatory alignment determine how quickly a firm can launch or scale. When these pathways work well, investment grows and innovation accelerates.
The opposite has been visible for a decade (at least). Companies often face unpredictable pathways, uneven timelines, and unclear requirements (think the original equity crowdfunding rules, open banking, payment modernization etc). Those conditions slow product launches, and discourage upgrades. They also weaken the broader economy by delaying the investment (both internal and external) needed to lift productivity.
2. Promoting More Competitive and Dynamic Markets
Vincent says competition pushes companies to improve and become more resilient:
“Canadian businesses that are highly exposed to international competition evolve and improve. This makes them more productive, competitive and resilient.”
Competitive markets encourage businesses to adopt better technology, strengthen processes, and serve customers more effectively. This raises productivity across entire sectors.
See: Competition Bureau Consultation: New Enforcement Guidelines
When competitive pressure is limited, firms face fewer reasons to upgrade or innovate quickly. That is the opposite of what a modern economy needs. Slower adoption means slower productivity gains, and slower gains leave the economy more exposed to global changes.
Leaving competition conditions unchanged would keep the loop intact and make it more difficult for Canada to close its gap with peer countries.
3. Investing In Skills, Mobility And Talent
Vincent points out that productivity depends on people as much as on technology:
“Investing in our talent … means making it easier to recognize professional accreditations across provinces and territories, and the foreign credentials of people who move to Canada.”
Training systems that adapt quickly, credential pathways that work smoothly, and mobility across provinces all help firms adopt new technology with confidence.
See: What Gen Z and Millennials Expect From Fintech
Today’s reality is different. Workers often wait months or years to have skills recognized, training programs lag behind new tools, and mobility rules slow the movement of talent. These conditions limit how quickly firms can scale, modernize, or respond to new opportunities.
Keeping this in place would weaken the very foundation needed for stronger productivity.
Productivity Gains Are Essential For Canada’s Future
Vincent’s message is measured but urgent. Canada's productivity problem is caused by multiple things, and no single fix. But the government policies that impact investment, competition, and talent development must work better than they do today. These are public frameworks that governments influence, and businesses must act on them once conditions improve.
The payoff is substantial and what all Canadians should be aiming for. Higher productivity strengthens incomes, supports wage growth without inflation pressure, expands competitiveness, and improves resilience in a world where shocks are becoming more common.
See: Fintech’s Role in Canada’s Productivity Revival
The status quo of slow investment, limited competition, and restricted talent must be changed to improve the the country’s economic strength and provide opportunities for Canadians to build a stronger future.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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