So disappointing

Macklem reverts to using a tired and frustrating trope

BoC Governor Macklem spoke yesterday: Structural change—Canada at a crossroads. I don’t have much to say regarding the content right now — seemed fine. But, why use the tired “Canada at a crossroads” trope in the title? Maybe it was just lazy.

I can understand using this tired trope if reference is made to earlier reports with similar names. Maybe Macklem think the reader will be able to make the link. It would have been better to refer to this as a hinge moment à la PMMC (more on that below).

I wrote about that specific trope a YEAR ago and highlighted how tired that term was (see, Musing on investment trends in Canada and the US, 27 February 2025).

Why am I irked?

Well “Canada at the crossroads” was the title of a 1991 report by Michael Porter and John Armstrong (representing the Monitor Company). It looked at very similar issues to those covered by Macklem.

Rather than look at that 1991 report, I looked at a 2001 update. A decade later.

To start, here is a passage on the key recommendations from the 1991 report:

“We found Canada to be at a critical crossroads as of 1991. Due to Canada’s impressive endowment of natural resources, its well-educated population, and its proximity to the US, the nation had enjoyed economic prosperity and a high standard of living. However, we concluded that this favorable situation was likely to erode and produce a decline in standard of living unless Canada and its firms chose a distinctly different path.

We outlined an alternative path that could retain and enhance the nation’s competitiveness. We recommended that governments move aggressively to restore a favorable macroeconomic context for Canadian business by tackling the budget deficit and reducing personal and corporate tax rates. We also recommended that governments eliminate the barriers to inter-provincial trade and investment that relaxed competitive pressures and fractured an already small economy.”

Remember these are observations from 2001, looking back at issues identified (and thus well established) in 1991.

And yet, the words ring as true today as they did then.

Ditto this passage from 2001 (highlighting mine):

“With respect to the microeconomic business environment, we offered recommendations in each of the four areas. With respect to Context for Firm Strategy and Rivalry, we recommended that governments pursue policies to enhance the intensity of domestic competition rather than try to produce national champions shielded from competition in the home market. In Demand Conditions, we recommended that governments adopt more stringent and forward-looking regulatory standards and restructure government procurement to make the government a more sophisticated and demanding customer. With respect to Factor Conditions, we encouraged governments to invest more heavily in education and specialized skills development and to step up the pace of deregulation in infrastructure sectors. In addition, we encouraged technology development policies more connected to industry clusters and mechanisms for faster adoption of new technology.”

These issues remain relevant today, particularly in light of Canada’s lagging adoption of Large Language Models (AI) among firms. As well, there are still significant challenges related to domestic competition (See, The Big Fix by Denise Hearn and Vass Bednar).

The observations on how things unfolded between 1991 and 2001 was also disheartening from a contemporary perspective:

“Consistent with its performance on standard of living, Canada registered strikingly poor performance in productivity growth.”

“Canada took the lesser path from the crossroads in 1991. There has not been a clear and relentless focus on upgrading productivity and pursuing global competitiveness.”

An implication of choosing the lesser path: Plus ça change, plus c'est la même chose

Last year I concluded:

While Canada’s investment trends have diverged dramatically from US trends in the past decade — weighing heavily on productivity growth and competitiveness — let’s also acknowledge that Canada has been coasting for over 30 years. The challenges have long been identified, solutions have been suggested, but when given the choice “Canada took the lesser path.” We can’t continue past behaviour. The challenge presented by Trump47 means this time really is different, so Canada needs to take another path.

So, we have a situation, where we do not seem to have made much progress on key problems identified more than 30 YEARS ago.

Now back to PMMC. In May 2025, I wrote Retiring a tired literary device (14 May 2025).

In PMMC’s speech after the cabinet swearing-in ceremony, he said:

“We’re going to deliver that mandate with a new team purpose-built for this hinge moment in Canada‘s history,”

My observation, with as great an emphasis as my keyboard would allow — Thank God he did NOT say “Canada is at a crossroads.”

The suggestion that Canada is at a or the crossroads is a tired literary device that, by this point, is devoid of meaning

I also said “If someone uses it please tell them to drop it.” Obviously no one at the Bank of Canada reads my material. Oh well.

Hinge moments

Here’s a way to think about a “hinge moment” — “When one lives at a hinge moment in history … then it becomes essential to admit that the old forms will not do, the old ideas will not do, because all must be remade, all, with our best efforts, must be rethought, reimagined, and rewritten.”

Hence, PMMC seemed to take the perspective that we need a new way to approach things as what we have done in the past has not worked and we are at such a critical point in our history, that failure is not an option.

Macklem seemed to align with PMMC’s thesis of a hinge moment at time when there seems to be a “rupture in the world order.” However, he then seemed to go back to the same tired playbook. I can do tired tropes too … Macklem reached into the same old bag of tricks.

If you want to show bold, forward-thinking, don’t fall back on tired tropes. It belies a lack of originality. So disappointing.

David Watt | Watt Strategic Economic Advisors

LinkedIn: www.linkedin.com/in/david-g-watt