In a September 11 Financial Post commentary titled “Fix bad policy if Canada wants investment,” economist Jack M. Mintz challenges Prime Minister Mark Carney’s strategy for attracting investment to Canada. The timing is deliberate. Canada’s Investment Summit on September 14-15 is intended to advance the government’s goal of catalysing $1 trillion in total public and private investment over five years.

Mintz is an influential Canadian tax and public-policy economist and has advised governments and international institutions including the IMF, World Bank and OECD.

Mintz does not dispute Canada’s need for investment. His disagreement concerns how to obtain it.

His most striking comparison is Ireland.

Using OECD data averaged over 2021-24, Mintz says total investment in Ireland is roughly 23% of GDP. But its composition is radically different from Canada’s. Corporations account for 78% of Irish investment, households 12%, and government 10%. Corporate investment alone equals about 18% of GDP.

Canada’s allocation is almost reversed. Businesses represent only 47% of total investment, the lowest corporate share among the OECD countries in Mintz’s comparison. Households, primarily through housing, represent 36%, the highest. Canadian corporate investment equals only 11.7% of GDP. Corporate investment per working hour is $7.23, compared with $28 in Ireland.

For Mintz, that difference helps explain Canada’s productivity problem. Canadians have accumulated enormous amounts of residential real estate, but businesses have invested relatively little in machinery, technology, intellectual property and other productivity-enhancing capital.

Carney’s answer is to mobilize public money alongside private capital. Mintz says roughly $75 billion in public investment vehicles, including the Canada Strong Fund, Canada Growth Fund and Canada Infrastructure Bank, will be used to encourage private investment. The government describes the broader objective as catalysing $1 trillion rather than spending $1 trillion itself.

Mintz calls the approach “industrial policy on steroids.”

His objection is that government-backed investment does not eliminate risk. It transfers part of that risk to taxpayers. Companies working with government may receive financing, regulatory advantages or protection unavailable to competitors. Politicians and bureaucrats therefore become involved in deciding which companies and technologies deserve capital.

The danger, according to Mintz, is crony capitalism. Profits can increasingly depend on obtaining favourable government treatment rather than producing better products. Capital may flow toward politically attractive projects instead of the projects generating the highest economic return.

His alternative is simpler. Improve permitting. Reduce regulatory uncertainty. Reduce bureaucratic overlap. Lower corporate taxes broadly rather than subsidizing selected companies. Government should finance genuine public infrastructure such as roads and ports but should not attempt to behave like an investment bank.

The diagnosis is difficult to dismiss. Canada invests too much of its capital in real estate and too little in productive businesses.

Whether Mintz’s solution follows from that diagnosis is a more complicated question.

Who pays for Canada’s investment push, and what happens to housing?

The first distinction is important. Carney’s $1-trillion objective is not a $1-trillion government spending program. It is a target for total investment, much of which is supposed to come from businesses, pension funds and international investors. Government capital is intended to attract multiples of additional private capital.

But the public portion still has to come from somewhere.

There are essentially three sources: current taxation, borrowing, or reductions in other government spending. Some government investments can also generate future returns. The Canada Strong Fund, for example, is being seeded with $25 billion over three years and is explicitly supposed to invest commercially rather than simply distribute subsidies.

The case for borrowing is strongest when government acquires an asset that will benefit Canadians for decades. Asking future taxpayers to pay part of a railway, electrical grid, port or other long-lived infrastructure is economically different from borrowing to finance current consumption.

The government is explicitly making that distinction. Its Spring Economic Update shows capital investment accounting for about $55 billion of the $65-billion federal deficit in 2026-27. By 2028-29, the government projects its operating budget to be balanced, leaving the deficit attributable to capital investment.

There is a legitimate argument for this approach. If $1 of government capital induces several dollars of productive private investment and raises Canada’s future productivity, future generations inherit both the debt and the productive asset.

Mintz’s objection is that the second half of that equation is not guaranteed.

If government picks poor projects, subsidizes investments that companies would have undertaken anyway, or protects politically favoured businesses, future generations inherit the debt without an equivalent productive return.

And the cost is becoming material. Federal public-debt charges are projected to increase from $54 billion in 2025-26 to $80.9 billion by 2030-31. That increase is not caused solely by the new investment strategy, but it demonstrates the opportunity cost of carrying more debt. Interest eventually competes with health transfers, defence, infrastructure, tax reductions and housing for government resources.

Higher taxes present the other danger. Funding investment through increased corporate taxation can undermine the very business investment the government is attempting to attract. Broad increases in personal taxes reduce disposable income. Borrowing postpones taxation but does not necessarily eliminate it.

There is therefore no free government capital. The relevant question is whether the return exceeds its fiscal and economic cost.

What would an Irish-style investment shift mean for Canadian construction?

Mintz’s comparison with Ireland becomes particularly important when viewed through the construction industry. His argument is not that Canada should stop building housing. It is that far too much Canadian capital is concentrated in residential real estate while too little is directed toward productive business assets. Ireland’s investment mix makes the contrast stark.

For construction, rebalancing toward Ireland would not necessarily mean less activity. It would mean different construction.

Canada would need more factories, data centres, laboratories, warehouses, processing plants, power generation, transmission systems, mines, ports and transportation infrastructure. These are physical assets that businesses use to produce goods and services. They also create substantial demand for engineers, contractors and skilled trades.

The imbalance remains visible today. In May 2026, Canada recorded about $16.2 billion of residential building investment, compared with only $7.1 billion of non-residential building investment. Within the latter, industrial construction represented just $1.46 billion.

The danger is that Ottawa tries to correct this imbalance mainly by adding government money. Mintz’s concern is justified. If government simultaneously subsidizes industrial projects, infrastructure and housing, all three sectors compete for many of the same engineers, electricians, construction workers, equipment and materials. When construction capacity is constrained, additional public dollars can partly translate into higher construction prices rather than additional construction.

Someone ultimately pays for that spending. Taxes reduce private resources available for investment. Deficits transfer part of the cost to future taxpayers. Borrowing can be justified for roads, ports and electrical infrastructure that will serve businesses for decades. It is harder to justify when government assumes commercial risks that private investors themselves are unwilling to take.

This is where Mintz’s alternative becomes compelling. Government can support a construction investment boom without selecting corporate winners. It can accelerate permits, reduce approval uncertainty, make serviced industrial land available, build transportation and utility infrastructure and create a tax environment in which private investors have reasons to build in Canada. Mintz explicitly argues that government should finance genuine public infrastructure while leaving commercial investment principally to the private sector.

The difficult question is housing.

If Canada moved toward Ireland’s investment proportions, housing’s share of total investment would have to fall substantially. But that does not require housing construction itself to collapse. What should change is the nature of government housing support. Ottawa has already committed $13 billion over five years to Build Canada Homes. That support should increasingly concentrate on affordable housing, public land, servicing, infrastructure and genuine market failures rather than broadly subsidizing residential demand.

Canada does not need to choose between homes and productive investment. It needs to stop treating residential real estate as its dominant investment vehicle. The construction industry can build both. But if Canada wants Irish-style productivity, a much larger share of what it builds must become the infrastructure and productive capital on which future income is actually generated.

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