**Bank of Canada Senior Deputy Governor Carolyn Rogers spoke at the Canadian Club of Toronto on Oct. 9. / SCREENSHOT**

The urgency to make Canada more productive has grown even sharper, Bank of Canada Senior Deputy Governor Carolyn Rogers warned in a speech to the Canadian Club this week in Toronto, arguing that the country must embrace more innovation and greater competition to drive growth and raise living standards.

“The bottom line is that there was an urgency to improving our productivity before, and that urgency has only increased,” Rogers said.

Her remarks build on a speech she delivered in March last year, when she called productivity a measure not of abstract economic performance but of Canadians’ collective ability to improve their quality of life and remain resilient in a rapidly changing world.

Since then, new trade policies from the U.S. have intensified the challenge, delivering what Rogers described as a “massive shock” to the Canadian economy. Meanwhile, many Canadians continue to struggle with a higher cost of living, despite inflation staying within the Bank’s 1% to 3% target range for over a year.

Higher productivity, she said, remains the most effective way to offset these pressures—boosting real wages, improving competitiveness and making Canada more attractive to investors.

Addressing how to move the needle, Rogers emphasized the role of competition. “The idea that competition can improve productivity is pretty intuitive,” she said. “Competition disciplines firms, forcing them to look for ways to reduce costs and inefficiencies so that the business can survive. Second, it encourages businesses to innovate so that they can differentiate their product or service and get an edge over other firms.”

She acknowledged the difficulty of finding the right balance: “An economy with too little competition will lag in innovation and efficiency and struggle to attract investment. An economy with too much competition can also have underinvestment and is more likely to experience instability and market failures. Either way, it will damage productivity.”

Rogers highlighted the financial sector as a case study in how regulation and market concentration affect productivity. Canada’s banking industry, dominated by six large institutions that hold roughly 93% of all banking assets, has long been praised for its stability—but that same stability can limit innovation and choice.

She pointed to two key initiatives that could change that dynamic: Real-Time Rail, a long-awaited modernization of Canada’s payments system, and open banking, which would give consumers control over their financial data and make it easier to switch providers. Both, she said, could unlock significant productivity gains by allowing new entrants and greater competition in a critical network sector.

“Greater contestability, more new entrants and more innovation in our financial sector would lead to competition that’s good for consumers, for productivity and for our economy,” she said. “We should lean into it.”

Looking beyond finance, Rogers urged policymakers and business leaders to resist the growing global trend toward protectionism and to embrace openness and reform. “As the world heads into a period of greater economic nationalism and more industrial policy, we need to resist the urge to add protections,” she said. “Instead, we should look for ways to encourage more innovation and greater competition.”