Canada's Strategic Challenges Series: Protecting Canada's Prosperity in a Digital Era (LPL1-V62)

Transcript: Protecting Canada's Prosperity in a Digital Era

[00:00:05 Text appears onscreen: Canada's Strategic Challenges Series – Protecting Canada's Prosperity in a Digital Era.]

Narration: On October 20th, 2025, Jim Balsillie spoke at a session of the Geopolitics and National Security Development Program for federal government executives. In the discussion, Mr. Balsillie explored how intangible assets such as data and AI now drive prosperity and sovereignty, and emphasized the importance of having good policies in place to protect Canada's prosperity and security in this context.

[00:00:41 Text appears onscreen: Canada School of Public Service Geopolitics and National Security (LPL-144) – Jim Balsillie, October 20, 2025.]

[00:00:45 Jim Balsillie appears in a virtual chat window.]

Jim Balsillie (Retired Chairman and co-CEO, Research in Motion): The digital transformation over the past 40 years has created a new economy in which power, wealth, and security are rooted in the ownership of intellectual property and the control of data and AI. These assets behave differently in the market than tangible goods and require different strategies. They now make up over 90% of the S&P 500's $49 trillion value.

[00:01:07 A slide is shown with the title "Shift From Tangibles to Intangibles" above two figures, a graph showing components of S&P market value and a graph showing tangible and intangible S&P 500 capital from the knowledge-based economy to the data-driven economy to the machine knowledge capital. Text below the figures reads "The Magnificent Seven (Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, Tesla) have a combined market cap of about $17 trillion, of which about 90% is composed of intangibles." Source: Ocean Tomo and https://papers.ssrn.com/abstract=4762228]

With the rise of AI, we've entered an era of machine-knowledge capital, a new form of productive capital that competes with and complements human capital. Technology is cross-cutting with economic, social, and security dimensions that must be expertly considered. It requires both national policy frameworks and international coordination. It shapes how we organize our public and private lives, as well as how societies govern themselves.

[00:01:40 A slide is shown with the title "The Dual-Use Nature of Intangible Assets" above two figures highlighting international, domestic, economic, and non-economic effects of intangible stock assets like IP and data, as well as government services, economic assets, security assets, personal and social assets, and geopolitical assets.]

Because pervasive dual-use characteristics, as shown on this slide, have effects beyond the economy into social, security, health, democracy, sovereignty, and geopolitical realms, we must therefore research, evaluate, and concurrently govern accordingly. Innovation, a longstanding economic concept, means commercializing ideas. But in Canada, we've confused it with other activities and our outcomes show it. Much of our current purported innovation activity today is stuck in outdated 1970s thinking.

[00:02:22 A slide is shown comparing the economy of traditional, tangible goods to the economy of ideas and tangible goods, with text that reads:
"Ownership of physical property is a positive right -> Owning ("generating") IP is a negative right"
"Production and sale of physical property to generate revenue -> Amassing IP and controlling data or artificial intelligence (AI), then restricting use to collect "rents""
"The objective in industrial and services economy is to move inventory -> The objective in the innovation economy is to acquire IP and data or AI assets"
"Traditional goods can only be owned by one person at a time ("rivalrous") -> Both IP and data or AI are globally and simultaneously accessible by unlimited number of people ("non-rivalrous")"
"Traditional infrastructure needed to move goods across borders to individual customers -> Impossible to determine where IP and brokered data originate, where they are stored (owned), and how they move across borders"
"Supply chains feature multiple vendors competing with each other based on cost effectiveness" -> Value chains are based on winner-take-all economics"
"Competition rules prevent traditional production monopolies -> IP is a government-created temporary monopoly"
"Trade liberalization increases competition and reduces prices -> Stronger IP protections and the natural monopoly of data or AI decrease competition and increase prices"
"Traditional trade agreements reduce the value of vested interests -> "Asset enhancement agreements" raise value of vested IP-based and data or AI interests".]

Our students, workforce, and citizens are vulnerable to these shortcomings, requiring a pivot to deliberate strategies that drive productivity, prosperity, and sovereignty in the 21st century economy. The tangible and intangible economies are fundamentally different. In the production-based industrial economy of tangibles, the ability to produce efficiently at scale and sell at lower prices enables the capture of markets which underpins profitability. With the shift to a knowledge-based economy 35 years ago, companies and countries focused on strategically generating valuable IP assets, and more recently, to strategically controlling valuable data assets. Wealth accrues to the owners who amass these two rent generating assets. Today, despite calls from the domestic tech industry 10 years ago, Canada still has no national data strategy and a very limited set of programs that could boost our IP stock assets.

[00:03:18 A slide is shown with the title "Paycheques are eroding" above two figures, a graph showing countries' projected annual growth in real GDP per capita from 2020 to 2030 and a graph showing the spread between United States and Canada GDP per capita from 2002 to 2024 above the text:
"Canada to trail Organisation for Economic Co-operation and Development (OECD) in per capita real GDP growth"
"The OECD has projected that Canada's economy will be "the worst-performing advanced economy over 2020 to 2030 and the three decades after." – Source: OECD"
"Canada's per capita GDP has been shrinking 0.4% a year since 2020, the worst rate for any developed economy in the top 50 – Source: Financial Times, May 2024".]

Because Canada missed the shift, we are seeing Canada's standard of living in steady decline. Our GDP per capita shrank by 0.4% annually over the past five years, worst among the top 50 developed countries globally. The OECD projects Canada will be the slowest-growing advanced economy through 2060. The growing gap in GDP per capita between Canada and the U.S. further shows these are not global conditions but a consequence of a lack of strategic orientation as the world changed.

[00:03:52 A slide is shown with the title "Cost of Living is Getting Higher" above an excerpt of a Globe and Mail article titled "Half of young Canadians spending more than 50% of earnings on rent. The excerpt reads:
"Roughly half of young renters and a third of tenants at all ages are spending the majority of their after-tax income on rent, according to a new report. Experts say the survey, which was published by Rentals.ca this week, shows that the adage of limiting your rental expenses to one-third of your income is simply no longer possible for many Canadians – a situation that could threaten the ability for renters to adequately save for retirement. "It's a benchmark that young renters are taught by their parents, or many financial advisers say is the amount you should spend for housing," said Giacomo Ladas, a spokesperson for Rentals.ca. By this survey, it becomes really clear that that's almost impossible, especially when we've seen rental prices skyrocket in recent years."]

As paycheques have gone down, costs keep going up. The Globe and Mail recently reported roughly half of young renters and a third of tenants of all ages are now spending most of their after-tax income on rent. Experts warn this leaves younger generations unable to build savings or prepare for retirement as costs continue to skyrocket.

[00:04:16 A slide is shown with the title "Canada's Original Sin: They Didn't Even Know that a Revolution Had Happened" above an image of the Government of Canada report "Agenda: Jobs and Growth – Building a More Innovative Economy" next to the text:

"What the Orange Book said:

• Rooted in outdated production economy mindset (resources and manufacturing)
• Promised "better jobs" with "more efficient production"
• Focused on skills, foreign direct investment, and deregulation
• Proposed frameworks that assumed the market would deliver prosperity
• Emphasized globalization without strategy

What the Orange Book ignored:

• Ignored shift from tangible to intangible economy
• Did not reference the TRIPS Agreement (January 1996)
• Did not reference NAFTA's IP provisions
• No mention of IP as a strategic asset
• No recognition that knowledge was becoming "owned"
• Ignored the shift from open science to IP rents."]

Canada's policy frameworks were cemented in 1994 in the report Agenda: Jobs and Growth – Building a More Innovative Economy, known as the Orange Book, published just after Canada signed TRIPS and NAFTA, two agreements that redefined global value creation through IP data governance and rent seeking on intangibles. The Orange Book did not mention IP once. Instead, it proposed deregulation, skills trading, and market competition, ideas suited to a production economy but unfit for an emerging knowledge economy of intangibles, one where value comes from owning ideas, not goods. This submission was the original sin. Nations that embraced IP, data, and digital infrastructure now dominate global value chains while Canada was left structurally unprepared. The consequences are evident today, shaping Canadians' daily lives and prospects.

[00:05:17 A slide is shown with two figures, a graph of patent filings from the United States Patent and Trademark Office and a graph of Canada's international IP payments and receipts from 1981 to 2021, above the text: "Patents are the most concrete and comparable measure of innovative output over countries and time." – The IT Revolution and the Globalization of R&D (http://www.nber.org/papers/w24707.
Source: United States Patent and Trademark Office, Source: Statistics Canada]

In today's economy, productivity comes from new ideas that bring in new, high-profit margin revenue. IP has a direct impact on wealth and power at the firm level and nationally, which is why smart innovation jurisdictions focus on owning and protecting these assets. Canada's IP payments and receipts deficit is growing and it would be far larger if we accounted for the net flow value of AI and data.

[00:05:47 A slide is shown with title "Value-Added Strategies for the Intangible Economy" above a circular chart that displays the cross-cutting issues of data and AI: economic prosperity public safety and national defence, public health (core responsibilities), democracy, algorithm ethics, privacy (value-oriented objectives), cybersecurity, competition, and sovereignty and control (instrumental ends). Text next to the figure reads:
"The Data-Driven Economy's Structural Characteristics Lead to Natural Monopolies
1. Economics of Scope
2. Economics of Scale
3. Network Externalities
4. Information Asymmetries"
"Data is not the new oil, it's the new plutonium, amazingly powerful, dangerous when it spreads, difficult to clean up, and with serious consequences when improperly used." – Jim Balsillie; International Grand Committee on Big Data, Privacy and Democracy; May 28, 2019.]

This is a representation of how I think strategically about the cross-cutting issues that the digital transformation raises. It's about the generation of wealth, prosperity, and preserving competitive markets. It's also about values such as privacy, health, the integrity of democratic process, national security, and sovereignty through both policy and infrastructure. Given its social nature and non-rivalrous public good characteristics, data gives rise to spillovers for externalities, both good and bad. Listed on the right are the structural characteristics of the data-driven economy that naturally led to monopolies, requiring policymakers to link these factors in their regulatory responses.

[00:06:35 A slide is shown with title "AI Fortunes Depend on IP ownership" above the text: "To date, 1.8 million AI patents have been filed and registered globally" and a list of the top 30 registrants of AI patents. Source: STG's dataset of 1.4 million AI patents.]

AI is transforming industries at scale in ways we haven't seen since the rise of the internet. Over 1.8 million AI patents have been granted globally but Canada does not appear in the top 100 holders, even though our federally-funded research built foundations of the field.

[00:06:55 A slide is shown with title "Impact of Advanced Manufacturing on Productivity and Labour" above two figures from Federal Reserve Economic Data, a graph showing manufacturing output in the United States from 1960 to 2023 and a graph showing manufacturing employment in the United States from 1960 to 2023. Source: Federal Reserve Economic Data]

Any assertion that U.S. manufacturing capacity faded over the decades is not supported by the facts. The charts in this slide show that as U.S. manufacturing output has experienced continuous growth for the past 60 years, it did so with fewer people as automation displaced labour because intangible investments and ownership drove higher outputs. While the U.S. gained efficiency, control, and value-add, Canada took a different path by doubling down on disaggregated production labour without a strategy to own the IP and AI data to capture the high-value segments.

[00:07:35 A slide is shown with title "Understanding Intangibles in Global Value Chains" above a graph which shows A to represent R&D, design, AI compute, etc., B to represent manufacturing, assembly, etc., and C to represent marketing, retail, e-commerce, etc.]

The graph in this slide illustrates the returns on global production. Together, A and C determine the terms of trade across the entire value chain. Point B, the midstream work of production and assembly, will always be necessary whether reshored or offshored, but control of B also provides strategic advantage and learning environments that feed back to A and C for a fulsome approach to both control and value. But if policymakers only focus on a disaggregated B without securing control of A and C, they are locked into a race to the bottom in a shrinking economic zone where cost is the only basis for competition. The federal government's $57 billion EV battery investments illustrate this failed strategic thinking.

[00:08:29 A slide is shown with title "The Triumph of Capital over Labour Broke the Kaldor Ratio (Fact #1)" above the text: "Nicholas Kaldor's statistical properties of long-term economic growth (in a 1961 paper) summarized the "remarkable historical constancies revealed by recent empirical investigations". Fact #1 (Kaldor ratio): The shares of national income received by labour and capital are roughly constant over long periods of time." A graph below compares personal income to labour percentage of GDP.]

In 1961, Nicholas Kaldor identified a set of stylized facts about modern economic growth, including the observation that the shares of national income received by labour and capital were broadly constant over long periods of time. This stability meant productivity gains translated into wage growth, reinforced social contracts, and broadly shared prosperity. That foundation has since eroded over the past 35 years because of five overlapping structural shifts.

[00:09:06 A slide is shown with the text:
"The Five Structural Forces That Broke the Kaldor Ratio:
1.1 Global trade agreements in the early 1990s that arbitraged labour to lower-cost countries
1.2 The global knowledge-based economy, emerging in the mid-1990s, which separated tangible-production supply chains from intangible value chains
1.3 The e-commerce revolution in 2000, which created a new social class, the "precariat", destabilized employment norms, and undermined long-term worker security
1.4 The global data-driven economy, emerging around 2010, which commodified human attention and pioneered "gig economy" employment structures
1.5 The emergence of the contemporary machine knowledge capital era, in which AI is a new form of productive capital that competes with and complements human expertise".]

The five structural forces reshaping labour are, one, globalization of trade deals that arbitrage labour to lower-cost countries, two, the knowledge economy that separated tangible production supply chains from intangible supply chains, three, the emergence of e-commerce that eroded job security and created a new precariat class, four, the data-driven economy that commodified human attention and pioneered the gig economy, and now five, machine knowledge capital which is a new factor of production.

[00:09:44 A slide is shown with title "Contemporary 'Trade' Deals Are Now Overwhelmingly About Regulatory Remote Control" above the following quotes:
"The advisory committee system, established by the U.S. Congress in 1974, was created to ensure that U.S. trade policy and trade negotiating objectives adequately reflect U.S. public and private sector interests. The advisory committee system consists of 26 advisory committees with a total membership of approximately 700 citizen advisors" – Office of the United States Trade Representative
"The preference is always to lease space for a shorter duration rather than enter into … a long-term, much less a permanent, arrangement. Why lock in today's market rates if you will be able to charge more in the future?" – Jared Kushner, Senior Advisor to the President, CNBC, February 2020.]

Modern trade agreements secure regulatory power, market access, and long-term leverage. By law, the U.S. systemically brings industry and experts to the table early shaping rules to its advantage. As the quote shows, these deals reserve their flexibility and control. The Trump administration told us publicly in 2018 what to expect but we did not listen. If we want better outcomes, we must update our capacity and strategies or risk deeper economic dependence, declining sovereignty, and permanent exclusion from parts of the economy where value and power are created.

[00:10:28 A slide is shown with the text:
"Knowledge Rights in a Digital Transformation Era – The right to:
1.1 reality (freedom from systemic corruption of knowledge and perception)
1.2 knowledge (freedom from illegitimate concentration of knowledge)
1.3 agency (freedom from systemic manipulation of individuals' thoughts and behaviour)
1.4 privacy (freedom from incursions into the private sphere, including mental privacy)
1.5 self-determination and identity (freedom from control over one's likeness and sense of self)
1.6 community (freedom from systemic manipulation of collective behaviour)
1.7 political participation and democratic self-governance
1.8 fairness (freedom from algorithmic bias, discrimination, and inequitable access to technology)".]

The digital age is shaped by who controls data, the algorithms that act on it, and the information environments they create. This new era of human commodification violates fundamental human rights. The data generated by our experiences, choices, and even our thoughts are captured, processed, and traded as raw material for manipulative algorithms for profit and power.

[00:10:58 A slide is shown with the text:
"Mapping Knowledge Rights to the International Covenant on Civil and Political Rights:
1. Reality: International Covenant on Civil and Political Rights (ICCPR) Article 19: Freedom of opinion and expression and "freedom to seek, receive, and impart information and ideas" without interference
2. Knowledge: ICCPR Article 19: All individuals have the right "to seek, receive, and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any media of his choice."
3. Agency: ICCPR Article 18: "Everyone shall have the right to freedom of thought, conscience, and religion without coercion."
4. Privacy: ICCPR Article 17: "No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home, or correspondence, nor to unlawful attacks on his honour and reputation."
5. Self-determination and identity: ICCPR Article 1(1): "All peoples have the right of self-determination" and to "freely determine their political status and freely pursue their economic, social, and cultural development."
6. Community: ICCPR Article 27: The right of persons belonging to ethnic, religious, or linguistic minorities "to enjoy their own culture, to profess and practise their own religion, or to use their own language."
7. Political participation and democratic self-governance: ICCPR Article 25: Every citizen has the right "(a) to take part in the conduct of public affairs, directly or through freely chosen representatives; (b) To vote and to be elected at genuine periodic elections which shall be by universal and equal suffrage and shall be held by secret ballot, guaranteeing the free expression of the will of the electors."
8. Fairness: ICCPR Article 14: Everyone has "the right to a fair and public hearing by a competent, independent, and impartial tribunal," to be presumed innocent, to minimum guarantees for defence, and to procedural rights."]

These violations can be mapped and interpreted within the International Covenant on Civil and Political Rights, a landmark of the post-war world that recognized that freedom and dignity are universal rights that need to be protected by law. It enshrined rights to expression, privacy, identity, participation, and fairness. Enforcement of these rights has failed to keep pace in the digital era, with very real harms caused by these soft assets.

[00:11:30 A slide is shown with the title "Examples of United States' 2025 Strategic Behaviour" above the text:

"AI White Paper:

• In July 2025, the White House published America's AI Action Plan: Winning the Race
• Defines AI in terms of hegemony and global dominance
• Calls for securing data and building critical infrastructure (physical and digital)
• Goal is to achieve and maintain unquestioned and unchallenged global technological dominance

International Emergency Economic Powers Act Tariffs:

• Expands executive authority to restrict or tariff flows of strategic tech and data
• Treats digital infrastructure, AI, and compute as national security assets
• Weaponizes access to U.S. markets to shape global technology supply chains
• Sends the message that if you want access, you play by U.S. strategic terms

Guiding and Establishing National Innovation for U.S. Stablecoins Act:

• Anchors U.S. sovereignty in digital finance by securing the role of the dollar in the stablecoin era
• Creates a strategic financial rail to compete with foreign digital currency systems
• Extends U.S. leverage over global payments through regulatory control and reserve requirements

Deploying March-in IP Rights:

• Gives U.S. government leverage over IP developed with federal funding
• Authority to "march in" and re-license patents if public interest is at stake
• Prevents critical innovations from being locked up by private monopoly or foreign acquisition
• Signals willingness to actively manage IP flows as part of industrial strategy."]

In the last few months, the U.S. has exercised strategic behaviour for several policy areas to reshape the rules of the game. The AI Action Plan, which defines AI as a pillar of national power, the Genius Act for Digital Currencies, IEPA tariffs to restructure the terms of trade and regulatory remote control globally, and the assertion of march-in rights under the Bayh-Dole Act. These are not isolated, disparate initiatives but rather part of a coherent policy framework to enhance U.S. economic and security dominance globally.

[00:12:08 A slide is shown with the title "Policy Framework for the Knowledge-Based, Data-Driven Era" above a figure showing capture economic value, security in a digital era, and sovereignty addressed together with coherent national strategies in compliance with general agreement on trade in services.]

In November 2018, seven years ago, I gave a keynote to the IMF where I presented the four core elements that must be resolved together to craft a stable system that could advance welfare both for Canada and for similarly situated countries: safeguard national security in the digital era, enable fair access to new factors of production to participate in the value created in the knowledge-based and data-driven intangibles economy, and three, protect and enhance citizen welfare in the non-economic realms of privacy, democracy, mental health, human rights, etc. But fourth, comply with all international commitments under various agreements, trade, TRIPS, regional free trade agreements, etc. I believe the top three can be resolved and done together with appropriate national level implementations. Data-driven technologies are becoming the core infrastructure around which most society operates, so countries must be able to shape approaches if the system is to be sustainable and accountable to citizens. Helping shape this in an integrated fashion is technically complex but also an opportunity and imperative for Canada, yet the strategic behaviour of regulatory remote control by large global countries threatens all aspects of national sovereignty for smaller countries.

[00:13:40 A slide is shown with the title "How to Build a Prosperous Country – Then and Now" above the text:

"Era of traditional infrastructure:

National:

• Transportation (railways, canals, seaways, highways, airlines)
• Energy (hydro dams and transmission, pipelines, nuclear reactors)
• Communications (Bell Trans-Canada Microwave, Telesat Canada satellites)
• Culture (CBC, Canadian content rules)
• Global institutions (UN, Bretton Woods, NAFTA)

Cooperatives:

• Agricultural (feed supply, equipment, butteries, processing, marketing)
• Financial (credit unions)
• Insurance (mutual companies)
• Energy technologies (Alberta Oil Sands Technology and Research Authority, steam-assisted gravity drainage, CANDU reactor)

Social:

• Universal education
• Labour regulations
• Environmental regulations
• Social welfare programs
• Socialized health care
• Canada Pension Plan"

"Era of intangibles (digital, IP, data/AI):

National:

• Recreate the Economic Council of Canada
• Updated foreign direct investment strategies
• Updated trade strategies and capacity rebuilding
• Updated research funding strategies
• Updated Competition Bureau regulations and appropriate resources
• Domestic media and content strategies
• National data strategy (updated Personal Information Protecting and Electronic Documents Act, security framework, AI)
• National cyber strategy
• National IP strategy
• Strategic procurement
• Digital stability board or international digital governance
• Sovereign Digital Infrastructure (identity, cloud, information curation, AI, high-performance computing)
• Machine learning capital strategy
• Unified ledger strategy with tokenization legislation (digital currencies plus)

Cooperatives:

• Data trusts (energy, mining, forestry, agriculture, cities, health care, etc.)
• Patent cooperatives (key vertical sectors, key horizontal technologies)
• Digital standards

Social:

• Data governance regulations to protect private sphere and personal autonomy
• Data governance regulations to protect elections and democracy
• Use tax code to address externalities from digital realms
• Future of work (social programs, education)".]

There is no doubt there is a difficult path ahead for Canada, but I am an optimist. On this slide, I've listed the areas, on the right, of digital policy infrastructure necessary for our changed world which determine the tenacity of a secure and prosperous nation's ability to withstand hard times while laying the foundations for the future. With new and emerging threats to our sovereignty and economy, we need coordinated approaches by policymakers who recognize the duty to support, advise, and implement the changes necessary to navigate uncertainty, fuel recovery, and usher in a prosperous future.

[00:14:20 Text appears onscreen: Q&A Q1: Given Canada's deep integration into global supply chains, won't a bigger role for government in protecting Canadian innovation only serve to increase our economic isolation?"]

When you say we're integrated in global supply chains, yes, but we're not integrated in global value chains. And therefore, we are competing with Guadalajara and Malaysia in cost on a race to the bottom because they can get the same machinery we can. It's available. So, right now, Mexico is 20% of the cost of a manufacturer in the U.S. And if we want to compete on global supply chains, that's what we have to meet, and that has been our strategy, lower our costs, subsidize more, and then our GDP goes down and costs go up and people can't make ends meet.

[00:15:12 A slide is shown with title "Understanding Intangibles in Global Value Chains" above a graph which shows A to represent R&D, design, AI compute, etc., B to represent manufacturing, assembly, etc., and C to represent marketing, retail, e-commerce, etc.]

The issue is that, how do we participate in global value chains, which are the A and C? And you can link in some B as you pull it through. As I said, it's always going to be there. This is not isolation. This is how the game is played. We give money to Siemens to come here. We give our best ideas to Tesla and 3M. We give it to Ferrero Rocher to give minimum wage jobs in Brantford for a family worth $25 billion. It makes no sense. We're taking developing economy strategies as a developed economy. And so, it's not isolation. It's playing the game as it's played to capture more value-add. And if we don't get orientation and we don't have the capacity and we don't have the front-footedness, then paycheques will keep going down, costs will keep going up, and sovereignty will keep eroding, but this stuff is very nuanced. It's very technical. It's very predatory. It's a navigation and everybody's playing it. Look at all the strategic behaviour of the U.S. I just gave four examples, I could give you many more, and many others are doing other forms of strategic behaviour. And so, that's that foreign affairs thing, caught it right, that the big play one way and the small create their own dark spaces, and that's not isolation. That's survival.

[00:16:32 Text appears onscreen: Q2: What can government do to keep more intellectual property (IP) in Canada where it can contribute to national prosperity?"]

Well, the first thing to understand is a startup is not a business, it aspires to be a business, and a business means this full public-private framework to ensure that they happen. Investment doesn't make you prosperous per se. It's the hope that you're creating a prosperity function, that you can sell something that creates terms of trade. But in an intangibles economy, they take all the IP out of the country. Even if it's a produced economy, it's not taxed here. There's no wealth effect here. What's Google's and Microsoft's supply chain in Canada? And then, when they call these investments from battery companies into here, they're not because 90% of it is the sale of their domestic machinery into Canada for the processing of these things, whether it's a South Korean thing or German or whatever. So, we're calling it foreign investment, and really, it's a sale for them. So, it's a misconception of what is a company, how do you have a company, how do you capture value-add, how do you drive your terms of trade, and because there is no expertise and no orientation in that, we falter systemically. So, what do we do? We default to the one thing that gives us good terms of trade, hydrocarbons and some minerals, but those are all 1950s economies. And don't get me wrong, we're very blessed to have the 1950s resources but our economic structure is much closer to Russia's than it is to America's or Germany's. And therefore, it requires, what does it take to support these companies and have them grow and capture the value-add? And they are always a public-private framework. As you mentioned, I mean, I was on the U.S. Business Council. I was the only Canadian there, and very famous Jeff Bezos sponsored me, and I'm in the room, and I mean, I make a joke about America, and I say this respectfully, they'll mess everything up but getting rich. America is very good at getting rich, and I don't say this dismissively. I'm saying they figure out how to bring good terms of trade.

And you look at everything Trump's doing, he's going around and jackhammering purchase orders for his companies to bring back strong terms of trade, and we have to play that game. It's not a hands-off game, it's not a foreign firms game, and it doesn't mean either-or with our traditional resources. It's an and. But also, we can value-add into those industries as well as others but it involves the ownership system. You have to make the strategic research actually catalyze companies rather than give them away. It needs strategic procurement. It needs cooperative sales. It needs setting standards that embed critical IP on these things. We've all had inattention in these aspects that design and govern it. And then, of course, if you look on your computer, I put that slide up, the USTR has, by law of Congress, 26 advisory committees that have 700, it's now a thousand, expert advisors that drive the text into these negotiations, and there's 26 negotiation tables for NAFTA. Funny, map 1:1 to their 26 advisory committees, been together for 50 years, and they drop the draft, a million words and you won't find the words "free trade" in it and there's no tariffs that they're getting rid of. So, what is it? It's the structural elements to control the rentier economy, and they call it modernization which is gaslighting. No, it's rule-setting to regulatory remote control of Canada, and we don't have anything to respond to that. We just do an ad-hoc, one-minute-to-midnight performative thing. But in fact, this is a deep, deep state of preparedness to ingest whatever it is you want to ingest in the rules, but we're substantially rule-takers. So, part of it is we go for the little victories we can get, but most of it has to be, now, how do we play in the game of the rules that are set up and how do we become a very shrewd navigator? So, it's all doable, but it's very technical and it's an orientation that's the opposite of hands-off. Nothing in America is hands-off. That's just a rhetorical twist. These are all strategic nation interest jackhammers. And therefore, how do we play? There's lots of things we can do but it starts by conceiving of the game as it is, not as some kind of sentimental, naive conception of some bygone era that really never was, but the nature of intangibles, because it's win-lost and it's abstract, it leads to much more strategic behaviour.

Narration: The Canada School of Public Service hosts exciting and insightful events, workshops, and courses on geopolitics and national security. To learn more, contact the following e-mail address.

[00:21:53 Text appears onscreen: "gnslp-pagsn@csps-efpc.gc.ca".]

[00:21:56 The CSPS logo appears on screen.]

[00:22:01 The Government of Canada logo appears on screen.]