Watch the video: The risks and benefits of opening up private markets to everyday investors
The Ontario Securities Commission wants to give retail investors access to private markets. But as SCP Fellow Rachel Wasserman, founder of Wasserman Business Law, tells BNN Bloomberg’s Andrew Bell, when you look closely, it starts to look less like democratization and more like offloading risk onto people with the least power to absorb it.
Private equity is already underperforming S&P index funds over 1, 5 and 10-year periods and PE’s biggest historical champions are quietly reducing their exposure. So, why would regulators suddenly be so eager to open the door for retail investors? This proposal to offer retail investors access to PE stands to benefit the asset managers and intermediaries, with everyday investors bearing the costs and risks. Financial inclusion does not mean broadening access to financial products that sophisticated players are already walking away from.
Speakers
Rachel Wasserman
Founder, Wasserman Business Law
Fellow, Social Capital Partners
Watch the video: Why do Canadians work so hard and get so little?
Low productivity means lower wages and a lower standard of living. Canada does need to boost productivity—but we keep trying the wrong things. Watch SCP CEO Matthew Mendelsohn explain the productivity conversation Canada actually needs to have.
Watch the video: Why would a company sell to its employees?
Canada is facing a $2-trillion business handoff. What if employees owned more of it? Our Director of Policy Dan Skilleter explains why a company would sell to its own employees, how it happens and who stands to benefits. Spoiler alert: employee-owned companies are shown to be 8-12% more productive, share more wealth with their workers, keep businesses Canadian-owned and shore up the resilience of local communities and the broader economy.
How Canada can curb the serial acquisitions quietly reshaping our economy
By Michelle Arnold and Kiran Gill | Part of our Special Series: The Ownership Solution
In recent years, Canadians have watched something change quietly in the economy around them. All of a sudden, there is upselling at the dentist, prices for veterinary care are higher than they used to be and the terms of a gym membership can change out of the blue, with no notice.
In many cases, these threats to day-to-day affordability are the byproduct of what competition experts call serial acquisitions—a pattern of larger firms buying up a series of smaller players to try and corner the market.
The smaller size of these individual transactions means they often fly under the radar of Canada’s Competition Bureau because they’re not big enough to trigger automatic scrutiny.
This makes serial acquisitions notoriously difficult for the government to detect and track, and even more challenging to curb.
The good news is that the Competition Bureau is aware of the negative impact of these quiet deals and is proposing updates to its Merger Enforcement Guidelines, which Social Capital Partners provided formal feedback on. The guideline updates clearly acknowledge the potential negative impacts of serial acquisitions.
This is real progress, reflecting years of advocacy across Canada by an array of organizations, including Social Capital Partners, and a growing recognition that competition policy must address how modern business consolidation actually happens.
But, these new guidelines will also inevitably act as an important test.
Because, while the new guidelines have been in the process of being updated, firms have quietly continued to buy up more companies in sectors across the country.
In 2025 alone, Neighbourly Pharmacy, which bills itself as “Canada’s largest and fastest growing network of community pharmacies,” announced the acquisition of 33 independent Canadian pharmacies. WELL Health expanded its footprint of independent health clinics again, following earlier waves of acquisitions. And U.S.-based AIR Control Concepts entered the Canadian HVAC market to buy up multiple businesses across Ontario and Atlantic Canada.
We can’t say for sure that any of these particular deals will have negative impacts on their customers or communities, but at a time when Canadians are having trouble making ends meet, the evidence shows that consolidations like these come with real risks to both quality and affordability.
Research from the United States has found that consolidation in healthcare services often leads to worse quality of care, while prices for consumers don’t improve—and sometimes even rise. Similar research on the heating and cooling industry shows that, in markets where HVAC competition quietly erodes, prices increase.
The new updated guidelines now explicitly state that a series of acquisitions will be able to be assessed as a whole—often referred to as a “roll-up” of many smaller deals. This is good progress, but this new authority will matter only if it is exercised.
To give the new Merger Enforcement Guidelines teeth, and to stay on top of these quiet consolidations, the Competition Bureau will need to be aggressive with enforcement.
That will mean tracking firms that are actively pursuing acquisition-led growth strategies, using their market-study powers to examine sectors prone to incremental consolidation and improving transparency around merger review results so Canadians can understand how decisions are being made.
The proposed Merger Enforcement Guidelines show clearly that Canada’s competition policymakers understand the problem they are trying to solve.
A fair and competitive economy does not emerge by accident. It requires rules which constrain the consolidation that gives a small number of companies outsized power to set prices, and the tools and resources to monitor behaviour and enforce those rules.
These guidelines can play an important role in keeping prices from quietly creeping up, preventing bigger firms from creating unfair playing fields that hurt small and new businesses and ensuring that Canada’s economy doesn’t concentrate even more wealth and power in the hands of a small number of players. The question now is whether we will be able to follow through.
From Guidelines to Action: Feedback on the proposed Merger Enforcement Guidelines
Background
Social Capital Partners (SCP) is a nonprofit that uses our private-sector experience and public-policy expertise to develop practical policy ideas that help working people build wealth, ownership and economic security.
As we’ve witnessed the increasing consolidation of corporate power in Canada in recent decades, we have concluded that it is impossible to achieve our aims of a fairer, more dynamic, more broadly owned economy without strong competition.
This thinking informed our 2023 submission to the consultation on the review of the Competition Act and our 2025 submission to the consultation on updated Merger Enforcement Guidelines.
Our most recent submission focused on serial acquisitions and the negative impact they can have on our economy. In the time since that submission, serial acquisitions have continued unabated.
For example:
| Pharmacies | In 2025, Neighbourly Pharmacy Inc. announced the acquisition of 33 additional pharmacies across Canada. |
| Primary care clinics | WELL Health acquired 13 primary care clinics in 2024, followed by an additional 9 in 2025, with 34 acquisition opportunities in the pipeline. |
| HVAC | Starting in April 2025, U.S.-based AIR Control Concepts has acquired four HVAC providers, O’Dell HVAC Group, Longhill Energy Products, Airsys Engineering and Rae Mac Agencies. |
We can’t say for sure that any of these particular deals will have negative impacts on their customers or communities, but at a time when Canadians are anxious about making ends meet, the evidence shows they come with real risks to both quality and affordability.
Research from the United States has found that consolidation in healthcare services often leads to worse quality of care, while prices for consumers don’t improve—and sometimes even rise. Similar research on the heating and cooling industry shows that, in markets where HVAC competition quietly erodes, prices increase.
Economic sovereignty is not just about control over essential physical infrastructure, like ports and telecoms. We allow our sovereignty to be chipped away when critical sectors like healthcare, housing repairs and childcare become consolidated in fewer hands – often foreign hands – in ways that make local markets less competitive and create undue obstacles for entrepreneurs to come in and start a business. When private equity (PE) firms systematically consolidate these sectors through serial acquisitions, they gain leverage over critical services, extract wealth and create higher barriers for Canadian entrepreneurs.
In an era in which the U.S. government is using its own companies to advance aggressive foreign policy objectives and openly discussing economic coercion against Canada, allowing further concentration of market power is a strategic vulnerability we cannot afford.
Summary of our feedback on the proposed Merger Enforcement Guidelines
We appreciate the opportunity to provide feedback and believe that the proposed guidelines meaningfully strengthen the clarity and credibility of merger enforcement in ways that are consistent with SCP’s concerns regarding (i) serial acquisitions, (ii) safe harbours and (iii) labour market impacts.
i. Serial acquisitions
SCP recommended that the Bureau more explicitly address serial acquisitions. We are encouraged to see that the Proposed Guidelines clearly articulate the right to examine all or part of a series of acquisitions as a merger, “even if each is not individually notifiable.” We are also pleased to see the proposed guidelines explicitly acknowledge the risks inherent from serial acquisition, by stating “where a firm engages in a series of acquisitions in the same market, each subsequent acquisition may be more likely to result in a substantial lessening or prevention of competition.” This is directionally aligned with SCP’s objective of ensuring that incremental consolidations are
properly assessed in a manner that recognizes their cumulative harm.
ii. Safe harbours
SCP recommended removing or avoiding “safe harbour” framing that could be interpreted as discouraging scrutiny of mergers below certain market share thresholds and are encouraged that the proposed guidelines have moved away from safe-harbour-style signaling.
iii. Labour market impacts
SCP recommended highlighting how labour market impacts should be considered in merger analysis and strongly welcomes the clear inclusion of labour market considerations in the proposed guidelines. This addition appropriately reflects a growing body of policy attention to labour market power as a dimension of competition.
Operationalizing the guidelines
While formalizing the proposed guidelines would be an important step, the real test will be in how the guidelines are operationalized.
We know that the final Merger Enforcement Guidelines will not be a document that is meant to contain details related to operationalization, but we hope that the Bureau will actively and publicly pair their enforcement power with the targeted operational recommendations we outlined in our 2025 submission. Specifically, we recommend that the Bureau:
Identify and more closely track PE firms operating in Canada
Given the outsized role that private equity (PE) firms play in leading anti-competitive efforts to consolidate markets through below threshold acquisitions, the Bureau should allocate dedicated resources to identifying and following the activities of the leading PE firms operating in Canada. This may involve engagement with expert stakeholders, monitoring key data sources, partnering with local governments to monitor mergers regionally, continuing to advocate for the development of a Beneficial Ownership Registry to increase transparency around consolidation patterns and/or introducing legislative tools that compel closed-end funds to report on any acquisitions within Canada.
Issue an open call on the impact of serial acquisitions on consumers and local economic resilience
Seeking feedback from across the country on the impact of roll-ups is an opportunity to access critical information on patterns of transactions that are often opaque and impact a diffuse cross-section of customers. The open call would ideally be done in partnership with local governments and could be specific to sectors like healthcare or be targeted more broadly. Similar efforts are being undertaken in other jurisdictions, with the White House tasking the DOJ, the FTC and the Department of Health and Human Services with issuing a joint Request for Information seeking input on the increasing power and control of the healthcare sector by PE firms. Given the interconnectivity of trade and economic power across the United States and Canada, it would be strategic to follow the United States’ lead and conduct parallel research to inform potential joint action.
Leverage market study powers to obtain information on non-reportable mergers in sectors ripe for serial acquisition
Given the opacity of serial acquisition patterns, the Bureau should take a proactive role in undertaking market studies to understand the state of sectors that are particularly vulnerable to serial acquisition. We suggest a particular emphasis on sectors in the care economy (e.g. long-term care homes, daycares, pharmacies etc.) as these markets are showing clear signs of distress and play a critical role in the health and functioning of our society.
Communicating the guidelines
We also believe that maximizing the effectiveness of the proposed guidelines requires increasing the accessibility of merger information. Canadians are more interested than ever in competition and the impact it has on our economic strength and resiliency. This energy should be leveraged and capitalized on by ensuring that access to pertinent information is available. Specifically, we recommend that the Competition Bureau:
Update the Report of Merger Reviews to be more accessible
SCP welcomes recent changes to the Report of merger reviews, including weekly updates and the inclusion of ongoing reviews. However, examples from jurisdictions like Australia and the European Union, offer valuable models for providing additional information that could improve public transparency regarding merger activity. Specifically, we recommend that the Bureau update the database to include:
- Plain-language summaries of the proposed mergers
- Plain-language summaries of merger decisions
- Relevant decision documentation (not including any sensitive information)
- Links to any additional merger reviews that either party has been involved in
- An option to be notified of new merger reviews as they are announced
Prioritize plain and accessible language in guidance and public information.
Canadians increasingly recognize the importance of competition policy to how people experience the economy. This growing awareness calls for a commitment from the Bureau to ensure that both its guidelines and public information are as accessible as possible. It’s no longer just lawyers and consultants delving into this content, but working Canadians who are concerned with the impact of mergers and acquisitions on their wages, consumer choices and economic well-being. SCP recommends that the Bureau make a concerted effort to prioritize clear, plain-language communication, including providing concrete examples to help Canadians understand the real impacts of economic activities.
Conclusion
The proposed guidelines represent meaningful progress in preserving and protecting competition in Canada. We strongly support their formalization.
However, we believe that the operationalization of these guidelines will be the real test of their impact. Guidance documents shape expectations, but enforcement outcomes shape behaviour. Serial acquirers are sophisticated actors who model regulatory risk into their strategies. If the Bureau does not demonstrate visible capacity to track, analyze and challenge roll-up patterns, market participants will correctly interpret updated guidelines as symbolic rather than substantive.
At a moment when Canada faces unprecedented economic pressure from the United States, allowing continued consolidation of key sectors through unchallenged serial acquisitions weakens our economic resilience and strategic autonomy. The Bureau has the mandate and the opportunity to act.
A youth employment supplement could rebalance Canada’s generational divide | Policy Options
By Kiran Gill and Matthew Mendelsohn | This post originally appeared in Policy Options
The Canadian economy is leaving many young people behind. Young adults today face unemployment rates reminiscent of a recession as well as a housing crisis that leaves many unable to afford necessities. Some 78 per cent of Canadians expect the next generation to be worse off than their parents. Growing wealth inequality has made young people even more pessimistic as they see mounting evidence that the economy is not working for them. They are earning less, saving less and face high barriers to owning assets unless they have help from family.
We also know that Canada’s taxes and benefits are skewed heavily towards serving older people. It is estimated that government spending on those 65-plus is three to four times greater than on those under 45. While Old Age Security (OAS) has become more generous over the last 50 years, government transfers to younger Canadians remain unchanged. At the same time, many seniors pay little or no tax thanks to overly generous tax exclusions, deductions and credits.
Last fall’s budget extended small amounts of funding to various youth employment programs, but the overall numbers don’t lie. The budget includes an increase of $28.3 billion in OAS spending by 2029, but less than $1 billion in new youth employment spending. As our policymakers grapple with how to structure a broad policy response to changes in global economics and geopolitics, we need to address problems with our taxes and benefits as well.
A youth employment supplement (YES) to the Canada Workers Benefit (CWB) would be a creative, scalable, cost-efficient way to motivate young people to get a job, as well as help those who are working but don’t make enough to save and invest. An early version of this model was proposed in a project by graduates Gabriel Blanc, Samuel De Grâce, Kiran Gill and Jacob Kates Rose from the Max Bell School of Public Policy at McGill University.
The Canada Workers Benefit
The CWB offers means-tested tax relief to lower-income working Canadians in the form of a refundable tax credit. All Canadians over 19, except those who are enrolled in post-secondary education or are incarcerated, become eligible for the benefit after the first $3,000 of employment income.
The refundable tax credit increases as income goes up. In 2025, it topped out at $1,633 for individuals and $2,813 for families. The CWB is gradually reduced once adjusted net income reaches a certain threshold. No benefit is received if net earnings are greater than $37,742 for individuals and $49,393 for families. Alberta, Quebec and Nunavut have different negotiated thresholds. Federal legislation allows provinces autonomy in how the CWB is structured.
The CWB, which grew out of a similar benefit introduced in 2007, has had support across the political spectrum and has encouraged people to work and helped reduce poverty (page 29) amongst those who are employed. However, young people are the group most likely to live in poverty and the workers benefit does not do enough for them.
How would a youth employment supplement work?
A youth employment supplement could be created through an amendment to the Income Tax Act that would double CWB payments for single workers between 19 and 29 years old to an additional maximum of $2,000. To ensure the YES were properly targeted, the supplement would be calculated using existing CWB phase-in and clawback rates. Based on 2024 tax data, the average YES benefit for singles would amount to $1,179.
The supplement would not place any administrative burden on recipients. The Canada Revenue Agency would be able to determine eligibility and disburse funds using existing tax data. Based on the current proportion of CWB recipients between the ages of 19 and 29, a YES could benefit close to two million Canadians. And, as the CRA expands automatic filing, even more young workers could seamlessly receive the benefit.
Expected impact
Young adults today face higher hurdles to economic security, home ownership and saving for retirement or emergencies than previous generations. And building assets requires disposable income to invest and save. A 2024 report from Statistics Canada found that 55 per cent of people between the ages of 25 and 44 had difficulty meeting day-to-day expenses. . And a rental survey last summer found that almost half of respondents between 18 and 24 were spending more than 50 per cent of their income on rent, while facing an increasingly insecure job market.
At the same time, young people are carrying growing debt that many are unable to pay off. These debts are increasingly to private credit services that charge extremely high interest rates. A YES would not only help young Canadians meet basic needs, but would also aid them in establishing a viable financial foundation.
Income support programs like this have been shown to improve post-secondary educational outcomes and workforce participation. Research also shows that programs like a YES encourage financial planning and help maintain a stable, consistent standard of living in the face of uncertain income patterns.
Canada is facing significant economic transformation driven by climate change, technology and a rupture in North American and global trading and security. Although the long-term trends are uncertain, we are already seeing reduced hiring, particularly for entry-level professional jobs. Our taxes and benefits need to provide more security and income support to younger workers.
Costing and potential funding sources
In the 2024 tax year, a YES for single adults, defined as those with no spouse or dependents, would cost $2.29 billion. This figure does not include the cost of any changes to the disability supplement (to the CWB) or a YES for couples. These would need to be designed differently and would have additional costs.
By encouraging young adults to work, the added supplement to the CWB would, over time, lead to workforce retention and increased employment rates. And due to its inherent flexibility, it could easily be scaled or altered. Additional income tax revenue from the YES would also offset some of the costs.
New targeted programs, such as a YES, could be funded by reforms to our taxes and benefits. Paul Kershaw, founder of and lead researcher at Generation Squeeze, estimates that modest changes to Old Age Security and age and pension income tax credits would save between $14 billion and $19 billion annually.
An agenda for young adults
Canada is overdue for a broader debate on intergenerational fairness and how our taxes and benefits support — and exclude —different age groups. We continue to live with programs designed by baby boomers to provide security to seniors — even if they are well off. Yet young adults in our country face challenges entering the labour market, securing stable employment and saving to build some measure of economic security in the face of rising costs in almost every sector.
There is almost no government agenda to address this growing disparity. We need policies designed to make the economy work for younger Canadians and to show that Ottawa is responding to their needs. A youth employment supplement could help rebuild financial security and allow younger adults to buy homes, finance education for themselves or their children and save for the future.
Editor’s note: The authors would like to acknowledge Jennifer Robson, Paul Kershaw and Gillian Petit for their insightful comments.
Advocates urge Ottawa to extend ‘no-brainer’ tax incentive for employee ownership | CTV News
By Craig Lord, the Canadian Press | This article first appeared on CTV.ca
It took Peter Deitz eight years to figure out the best way to sell his business. But it wasn’t until the federal government opened up a new option for succession planning that he found the right buyer: his own employees.
Deitz—co-founder of Grantbook, a Toronto-based firm that supports organizations doling out grants to non-profits—said he dreaded the idea of simply selling to an outside buyer who couldn’t see beyond his company’s bottom line.
“I could not foresee a scenario where I would sell the company to a third party that might change that culture or change that special quality within the business,” he said.
Deitz found an alternative he could live with in an employee ownership trust—a vehicle that sees employees of a business get a stake of the firm without having to pay for shares while the owner is paid out over a period of time, typically through the company’s profits.
The federal government first proposed tax changes to facilitate employee ownership trusts in 2023. One of the key measures included in the fall economic statement that year offers a $10-million capital gains tax exemption to owners who sell their companies to their employees through the trust mechanism.
But that exemption was only planned for three years and is set to expire at the end of 2026, unless the federal government moves to extend the measure.
Advocates for employee ownership trusts say letting the tax exemption expire would undercut the model before it’s given a chance to shine. They also argue the vehicle could play a role in defending Canada’s economic sovereignty if Ottawa rallies behind it.Employee Ownership Canada was one of the groups lobbying the federal government to introduce these trusts.
The group’s executive director Justine Janssen said the model is great for employee engagement and for company founders worried about what will happen to their legacy when an outside party takes over and starts looking for efficiencies.
“We’ve had hundreds of businesses reach out and start to understand and contemplate the structure and many are on their way to taking advantage of the trust structure and the capital gains exemption that supports it,” she said.
Janssen said Employee Ownership Canada knows of four trusts established so far in Canada but added another 20 to 30 more could be in the pipeline this year.
Nina Ioussoupova, spokeswoman for the Canada Revenue Agency, said in an email that the CRA does not have “reportable data on the number of employee ownership trusts established to date in Canada.”
She said the “relevant data fields associated with these transactions are not captured in a way that allows for reliable reporting.”
Ioussoupova also declined to say how many company founders have claimed the capital gains tax exemption related to the trusts since it was made available, citing confidentiality provisions in the Income Tax Act.
Employee ownership trusts are a niche option and many businesses are just learning about them now, said Pamela Cross, tax partner at Borden Ladner Gervais LLP.
But if the capital gains exemption is waived, that will only limit their adoption, she said.
That exemption can help to mitigate some of the upfront risks for owners—which are often families trying to cash out from their businesses via the trust.
While employee ownership trusts remove some barriers holding employee groups back from buying out an exiting owner, Cross said financing the transition can be tricky and the model is best suited for businesses with predictable revenue sources.
After a trust is established, exiting owners can retain a minority stake and remain involved in the business but can’t hold a controlling share. Sellers looking to access the capital gains exemption also face a strict test of whether they still effectively control the firm, Cross said.
Some founders may feel letting go of the reins could affect their odds of getting a full payout, she said.
The capital gains tax exemption can also be clawed back if there’s a “disqualifying event” in the years after the sale—essentially, something that stops the business from operating as an employee-owned trust while the seller is still being paid out.
“Certainly there’s been a lot of interest in them,” Cross said. “The concern I have is that the benefits of them are not attractive enough to really make them comparable to a third-party sale, where you can just get paid out on closing and walk away.”
Succession plans are often hammered out over the course of years, not months, and Janssen said the narrow window remaining on the capital gains exemption could limit the number of businesses seriously considering the model.
She said she wants to see the federal government commit to making the tax incentive permanent, or at least offer a defined extension, to give some predictability to owners considering an employee ownership trust.
“We’ve heard many business owners say that that capital gains tax exemption was just enough to make it a no-brainer for them and to feel like they really got fair value and got compensated for that wait time as part of the transaction,” Janssen said.
When asked whether the federal government will extend the expiring exemption, a Department of Finance official told The Canadian Press in a media statement that “while the Government of Canada reviews the tax system on an ongoing basis, it would be inappropriate to speculate on any potential or prospective changes.”
The official noted that the 2025 budget implementation act, which has yet to be passed into law, proposes to extend the exemption to businesses sold to worker co-operatives.
Employee ownership trusts have proven popular in other jurisdictions, including the United Kingdom and the United States—though Cross said the programs in those countries are more generous for founders. In the U.K., for instance, the exemption applies to all capital gains earned from the sale of the business.
Deitz, who earlier this year got the full payout for his employee ownership trust ahead of schedule, did not use the capital gains exemption offered by the government because it’s only available to individual owners, and his stake in Grantbook was through a holding company.
But Deitz also said there should be no cap on the capital gains exemption and that it should apply to small and medium-sized businesses of any ownership structure.
He and Janssen both argue it’s in the federal government’s interest to promote employee-ownership models that keep Canadian companies—and decisions about their intellectual property and the welfare of employees—in Canada.
“This could be the signature project of the Liberal government as a nation-building endeavour to protect the economic sovereignty of Canadian small businesses,” Deitz said.
Sign the open letter | Make the Employee Ownership Trust incentive permanent
Employee Ownership Trusts: A Canada-strong solution
Make Employee Ownership Permanent
To the Honourable François-Philippe Champagne
Minister of Finance of Canada
Canada is at a pivotal moment. As thousands of business owners prepare to retire in the coming years, the decisions we make now will shape who owns Canada’s economy, where wealth is created, and whether communities across the country continue to thrive.
Employee Ownership Trusts (EOTs) offer a proven, community-oriented solution.
Employee Ownership Trusts are an answer to succession. They enable business owners to sell their companies to their employees, and be paid out of company profits over time. They keep businesses Canadian-owned, enable workers to share in the success they help create, and support long-term investment in local economies. They align directly with Canada’s goals of economic sovereignty, worker opportunity, and resilient communities.
Canada has already begun to see the promise of this approach. The country’s first Employee Ownership Trusts are strong, values-driven companies rooted in their communities and focused on long-term success. Financial institutions, advisors, researchers, and workers are beginning to build an ecosystem ready to support employee ownership at scale.
What the market needs now is certainty.
Making the Employee Ownership Trust capital gains tax incentive permanent would unlock broader adoption, support thoughtful business succession planning, and allow employee ownership to become a mainstream pathway.
This is an opportunity for Canada to:
- keep successful businesses in Canadian hands,
- empower workers to build lasting wealth and stability for their families, and
- strengthen productivity, investment, and growth in communities across the country.
Employee ownership has delivered strong results in peer economies such as the United States and the United Kingdom. With permanent policy support, it can do the same in Canada.
We urge the Government of Canada to act swiftly to make the Employee Ownership Trust incentive permanent and embed employee ownership as a durable pillar of Canada’s economic future. This is a practical, forward-looking step that benefits workers, businesses, and communities — and helps ensure a stronger, more resilient Canada.
Signed,
Canadians who believe in shared ownership, strong communities, and a Canada-strong economy
Watch the video: Are foreign takeovers good for Canada's economy?
We all want more investment in Canada’s economy. But as SCP Chair Jon Shell explains in this video, when it comes to foreign investment in the Canadian economy, or FDI, we have to ask: is it investment that builds? Or investment that buys? Because these are two very different things.
Mark Carney's Davos speech is a manifesto for the world's middle powers
By Matthew Mendelsohn and Jon Shell
Mark Carney’s recent speech at the World Economic Forum matters because it says plainly what too many leaders have avoided saying out loud: middle powers like Canada are not powerless, but we have been acting as if we are.
We have been “living within the lie” of mutual benefit with our outsized and increasingly erratic neighbour. But the good news is that discarding that façade makes it possible to remake our alliances in ways that could actually shore up our economy and better secure prosperity and well-being for Canadians.
“I submit to you all the same that other countries, in particular middle powers like Canada, aren’t powerless,” the prime minister said. “They have the power to build a new order that integrates our values, like respect for human rights, sustainable development, solidarity, sovereignty and the territorial integrity of states.”
At Social Capital Partners, we welcome the clarity of this call for a new order. It aligns with a clear-eyed understanding of how fragile the current global order has become, how its benefits are unevenly distributed and how badly it serves those without leverage. The vision also aligns with our deepest hopes to live in a world of peace, equality and democracy.
We are under no illusions.
There are valid critiques of the speech. It did not clearly name the role that decades of unrestrained capital have played in making peoples’ lives worse, delivering us to this moment. It didn’t identify that the very promoters of that system were sitting in the room with him in Davos. And it did not fully acknowledge Canada’s own habit of talking tough while failing to follow through.
All of that is true.
It’s also true that Canadians have made a series of choices over many decades that have left us deeply exposed. We do not own our digital infrastructure. We haven’t sufficiently protected the Arctic. We didn’t maximize our natural resources and lack sovereign industrial and defence capacity. We understand that Canada must choose which battles we will fight.
Carney stopped short of calling out Donald Trump by name but was blunt and overt in his rejection of what he called the mere illusion of sovereignty.
“When we only negotiate bilaterally with a hegemon,” he said, “we negotiate from weakness. We accept what is offered. We compete with each other to be the most accommodating. This is not sovereignty. It is the performance of sovereignty while accepting subordination.”
Oof. This line should land hard in Canada, because it describes much of our recent experience. We invoke independence while structuring our economy, trade and infrastructure around dependence. We describe integration as mutual benefit even when it leaves us vulnerable to coercion.
The system worked—for some. For many others, it did not. Naming that truth is a prerequisite for rebuilding legitimacy and a better global system.
Crucially, the speech did not lapse into fatalism, and many around the world have even characterized it as a rallying cry. He explicitly rejected the idea that smaller states must submit to the logic of greater powers, arguing that middle powers have real power if they choose to exercise it together.
This is not a sentimental claim.
Taken together, some of the world’s middle-power democracies, which Jon has previously suggested could include Canada, Japan, South Korea, Australia, France, Germany, Italy, the U.K., Spain and the Netherlands, would amount to about the same GDP as the U.S., with about six hundred million wealthy residents with massive buying power. Taken together, we also have vast natural resources, enormous pools of capital, many of the world’s most innovative firms and significant military and industrial capacity. We are among the most attractive places on earth to live in and invest in.
This is not marginal power. It is simply unorganized power.
That is why Carney frames the choice so starkly: “In a world of great power rivalry, the countries in between have a choice: to compete with each other for favour or to combine to create a third path with impact.”
The offering of a new Middle Power Alliance is compelling: we all believe in democracy, equality and freedom. We believe in international trade and the dignity of all people. And together, these commitments produce human well-being, prosperity and progress.
Competing for favour leads to fragmentation and a race to the bottom. Coming together opens the possibility of something more durable—and a hopeful vision that people and democracies can build something better.
“Collective investments in resilience are cheaper than everyone building their own fortress,” Carney told the group at Davos. The real question is not whether middle powers must adapt, because of course we must, but whether we adapt defensively or ambitiously.
Ambition here would mean countries coming together in a new way to share the load and think big: joint digital infrastructure, coordinated industrial policy, common standards, collective security where geography demands it and new multilateral institutions in areas like climate, health and research. We have done things like this before, and successes like the International Space Station are proof that advanced democracies can build together when we choose to.
Trump has made it perfectly clear that tariff threats to Canada are the new baseline. There is no winning strategy in standing alone; there is only waiting to be pressured again.
Coercion works when countries are isolated and fails when pressure triggers collective response. Especially on the heels of Carney’s speech being called “the most important foreign policy speech in years” by the likes of the BBC and The New York Times, Canada has a role to play in building this alignment.
The form of this middle-power group can vary—maybe it’s those core 10 countries, maybe you’d add Mexico, Brazil and the Scandinavians; maybe it’s NATO minus the U.S. plus a few key others, like South Africa. The group will undoubtedly grow over time. The big shift is that the alliances among democratic nations must be built without U.S. leadership. And, must show that democracy delivers real benefits to its people, so that the group grows and emerging economies have real allies—not just threats to fall in line.
Carney’s speech matters because it treats this moment as a rupture, not a passing disruption. It’s in this rethink that there is also relief: “From the fracture, we can build something better, stronger and more just,” he said. “This is the task of the middle powers.”
Whether or not this becomes a turning point depends on what comes next.
If the speech is met with caution and retreat, it will fade. If it becomes a mandate to build institutions, alliances and capacity, it could mark the beginning of a genuine third path to security and shared prosperity—out of a world drifting toward coercion and into one shaped by cooperation.
For the first time in a long while, that path is visible. More hope is possible. More ambition is possible. We have the power; we just have to organize. So, middle powers, unite!