During the Second World War, hundreds of professionals decamped to Ottawa to help C.D. Howe, the munitions and supply minister, create an industrialized economy from a standing start.<\/p>\n
Howe saw Canada as the \u201csecond front line.\u201d The battle was turning a weak and backward economy into one that could provide for the soldiers at the actual front. Before 1939, \u201cCanadian industry had never made a tank, a combat airplane or a modern, high-calibre, rapid-fire gun,\u201d Fortune magazine observed in 1945. By the end of the war, Canada was the world\u2019s fourth-biggest producer of war supplies behind the U.S., the U.K. and the Soviet Union. \u201cThe speed with which industry was organized and production started ranks as an industrial miracle,\u201d Fortune raved.<\/p>\n
The corporate mercenaries worked for token wages, albeit while collecting their professional salaries. Howe said their willingness to \u201csacrifice personal gain to serve their country\u201d represented \u201cone of the sources of the inherent strength of Canada as a nation.\u201d Howe\u2019s boss, William Lyon Mackenzie King, thought that was a bit much. Heaping praise on the ringers that Howe drafted \u201cshows a curious lack of proportion,\u201d considering the greater number of public servants who also contributed, King wrote in his diary.\u00a0<\/p>\n
It\u2019s possible the mandarins would have overhauled the economy on their own, but unlikely, historian Allan Levine concludes in The Dollar a Year Men<\/a>, his 2025 book on a rare moment when Ottawa and corporate Canada were simpatico. He also doubts that we\u2019ll ever see anything like it again. \u201cGiven the widespread mistrust of government today and the self-centred world we live in, it is difficult to imagine a similar collective response if Canada were to face the same kind of danger,\u201d Levine writes.\u00a0<\/p>\n There are loud echoes today from Howe\u2019s time. Canada isn\u2019t in danger like it was in 1939, but nor are we safe. Ray Dalio, the founder of Bridgewater Associates, one of the world\u2019s biggest hedge funds, describes<\/a> the current situation as a \u201cworld war\u201d characterized by smaller, interrelated conflicts rather than a clash of great powers. There\u2019s nowhere to hide in such a world.\u00a0<\/p>\n As in the 1930s, Canada\u2019s economy isn\u2019t ready for the rigours of a dangerous, unpredictable world. RBC Thought Leadership, the in-house think tank at Canada\u2019s biggest bank, this week estimated<\/a> that simply muddling along in six strategic areas\u2014oil and gas, electricity, critical minerals, defence, space and food\u2014will require investment of some $1.1 trillion over the next decade.\u00a0<\/p>\n Like Howe, Carney intends to deploy the power of the state to accelerate an economic turnaround. Also like Howe, he lacks confidence that the public service can keep up. Carney\u2019s chief of staff, Treasury Board boss and U.S. ambassador were all business heavyweights. He also appointed<\/a> a former pipeline CEO to lead his new Major Projects Office and a former banker<\/a> to lead his new defence procurement agency. The November budget said<\/a> the government had an \u201cimmediate-term goal\u201d of recruiting 50 \u201cexternal leaders in technology, finance, science and other sectors.\u201d\u00a0<\/p>\n The authors of the RBC study think Canada should strive to do more than muddle along. They put the cost of a \u201cstep change\u201d\u2014two new oil pipelines instead of none, for example\u2014at $1.8 trillion. The problem is that corporate Canada doesn\u2019t really do step change anymore. As the report notes, the non-financial corporate sector is sitting on more than $1 trillion of cash, a pile that Carney once called \u201cdead money<\/a>.\u201d\u00a0<\/p>\n Carney made that jibe in 2012 when he was Bank of Canada governor. The persistence of the hoard shows that the corporate class doesn\u2019t shame easily. It also hints at Levine\u2019s skepticism about our willingness to curb material want to support something bigger than ourselves. The characterization<\/a> of shelter and food inflation as a national crisis because an otherwise comfortable middle class feels<\/a> poorer is another example. So is Canadian Natural Resources Limited\u2019s decision<\/a> to pause its Jackpine expansion, undermining Canada\u2019s pitch as a reliable source of supply for countries who want to diversify away from the Middle East.\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0<\/p>\n History doesn\u2019t repeat, it teaches. One lesson of the 1940s is that a tight, top-down collaboration between government and business can bring about the sort of step change that thinkers at RBC imagine. But that doesn\u2019t mean a biography<\/a> of Howe is a template for ending Canada\u2019s economic drift. The federal bureaucracy has since added over eight decades of rules and norms and layers, making it a very different entity than the one Howe forcibly fused with private sector derring-do.\u00a0<\/p>\n The spirit of patriotism that inspired so many corporate sacrifices also is missing. Levine told me in an interview that many of the people he wrote about were formed by the First World War, an existential threat of a kind that no native-born Canadian adult has ever faced. \u201cThe desperation and the urgency is not there [today].\u201d\u00a0<\/p>\n Indeed. The recruitment of 50 skilled outsiders might be an immediate-term goal, but only if your definition of immediate extends beyond five months. A Treasury Board spokesperson said in an email that nothing has happened on that file since it was announced in November.\u00a0<\/p>\n