Jim Balsillie says Canada's failure to capture intangible asset value could cost $1 trillion per year. OECD projects lowest GDP growth. Next catalyst: June policy shift.
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Jim Balsillie, chair of the Council of Canadian Innovators, told a Toronto audience Monday that Canada's failure to reorient its regulatory environment toward intangible assets has created a structural economic disadvantage. The result, he said, is a projected OECD ranking as the worst-performing advanced economy in GDP per capita growth over the coming decades.
The simple read: Canada has missed the transition from a tangible-asset economy to one dominated by intellectual property, AI, and data. The better market read is that the gap is self-reinforcing and compounds annually. Balsillie pointed out that intangible assets now comprise 92 percent of the S&P 500's $55-trillion value. Canada's regulatory environment still prioritizes stable, tangible-asset investments, effectively "suffocating capital" by discouraging risk-taking on tech.
"Wealth, power, and security are rooted in the ownership and control of intangible assets," Balsillie said at Toronto's TIFF Lightbox. "Today [intangible assets] dominate, comprising 92 percent of the S&P 500's $55-trillion value."
The US has turbocharged its capture of intangible value through coordinated policy instruments. Canada has not. The consequence is a structural headwind that Balsillie quantified with a stark number: "Had we kept pace with the US growth over the past 15 years, Canada would generate roughly a trillion dollars more in national income per year."
The affected assets are broad: Canadian tech stocks, AI-focused companies, IP licensing firms, software, biotech, and any business whose competitive advantage rests on data or proprietary algorithms. The timeline is medium-term, with a potential inflection point as early as this June.
Balsillie argued that entrepreneurs have been operating "with the wind at your face" and urged founders to band together as a lobbying force. He said: "You guys have done what you've done with the wind at your face. Imagine if you had the wind at your back."
The US advances its interests through a coherent set of instruments, which Balsillie listed:
Canada has no equivalent coordination. The result is a fragmented approach that leaves Canadian innovators competing with policy headwinds.
Intangible assets – patents, software, data, brand equity – have higher marginal returns and lower reproduction costs than physical assets. Countries that create and capture these assets enjoy faster productivity growth and higher per-capita income. Countries that do not lose global GDP share. Canada, according to Balsillie, has lost share precisely because its regulatory framework was designed for the 20th-century economy of resource extraction and manufacturing.
The OECD projects Canada will have the lowest GDP per capita growth among advanced economies over the coming decades. That projection is a direct input into equity valuation models. Lower long-term growth expectations compress price-to-earnings multiples, especially for growth stocks. Canadian tech companies that compete globally are not immune. Their valuations are partly anchored to the domestic economic environment, even if their revenue is global.
A shift toward US-style coordinated policy instruments would reduce the structural headwind. That means a national AI strategy with funding and procurement preferences, a digital currency regulatory framework, and tax or IP incentives that encourage intangible asset creation and retention. Balsillie said "there's nothing to say it couldn't be fixed, and we could see the orientation starting this June."
Continued regulatory inertia. If Ottawa maintains its current approach – prioritizing stable, tangible-asset investments and failing to coordinate policy across AI, digital currencies, and IP – the GDP per capita growth gap will widen. Canadian tech companies will face higher capital costs and lower exit multiples compared to US counterparts.
Investors tracking Canadian markets should monitor the federal policy calendar. The next decision point is June, when Balsillie said orientation could start. That likely aligns with budget implementation or a major policy speech. For now, the risk is real, and the reward is asymmetric – only if Ottawa acts.
For a broader view of how policy shifts affect equity markets, see our stock market analysis. Investors comparing broker options for Canadian or US tech exposure may also consult our guide to the best stock brokers.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.