It might seem counterintuitive to publish a bullish report on Canada's economy when so much is in doubt.
The country is in a trade war with the partner it has relied on for generations, with its largest trading relationship being renegotiated in public and nobody able to confidently say where it will land. Labour productivity continues to lag global peers. And living standards have barely moved in a decade.
And yet, TD Economics recently published a paper arguing Canada could be on the verge of its best decade in a generation.
In an interview with the Toronto Region Board of Trade, TD Deputy Chief Economist Derek Burleton acknowledged how it might come across.
"I know putting out this report during a trade war might have raised a couple of eyebrows," he said.
He has at least a trillion reasons to be optimistic. As we covered in part one, his argument, laid out in Triggering a Canadian Investment Supercycle and co-authored with TD Chief Economist Beata Caranci, is that the country is sitting on more than $1 trillion in announced major projects across energy, defence, AI, resources, and transportation. If enough of them get built, Canada could enter a sustained investment boom lasting a decade or more. Economists call that a supercycle, and Canada has had four of them since 1899, the last ending around 2010.
The report is a scenario, not a forecast, and most of what's on that list is an announcement rather than a commitment. Triggering a supercycle is contingent on several factors lining up. But if it does happen, TD estimates Canada's GDP growth would run a full percentage point higher than the current baseline forecast, year after year, compounding to roughly $12,000 in additional output per Canadian by 2035.
"The world is Canada's oyster," he said, quoting his own report's conclusion. "So let's see what we can do with this potential."
TD Deputy Chief Economist Derek Burleton
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That is why what came out of this week’s Canada Investment Summit matters. Burleton’s thesis is not about the summit itself; it is about the roughly $1 trillion in major projects already sitting in Canada’s pipeline and the possibility that, if enough of them move from announcement to construction, they could trigger the next investment supercycle.
The summit showed there is capital looking for a place to land. Ottawa pointed to hundreds of billions in new investment commitments, and Prime Minister Mark Carney echoed language from TD's own report.
"We are launching the investment supercycle that the country needs," he said.
Declaring it is the easy part, though. Burleton says what it actually requires is far more outside capital than Canada attracts today, not just the ambition to want it.
"The curve has to dramatically bend on the upside if we have any chance at all," he said.
Foreign investment has been picking up after years of weakness, but reaching TD's high-end scenario, where investment over the next decade climbs to between $1.5 and $1.7 trillion, would take considerably more than that.
Global investors appear willing. A recent CPP Investments survey found 94% of institutional investors plan to maintain or increase their Canadian holdings over the next three years, the strongest retention of any developed market it studied. But when asked what was holding them back, those same investors pointed to a shortage of projects large enough and ready enough to absorb the sums they work with.
That gap between available capital and shovel-ready projects was on display earlier this year. The UAE pledged C$70 billion to Canada in late 2025. When a delegation met with the federal Major Projects Office in June, they were told it was too early to deploy the money, because there weren't enough projects far enough along to absorb it.
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For decades, easy access to the American market mitigated some of Canada's other challenges. Market diversification, labour productivity, and interprovincial trade all mattered less when the biggest customer was next door and the border was open. That's no longer the case. Burleton thinks the timing of the report is the point, not an awkward coincidence. The disruption is what makes the case for acting on everything within Canada's own control.
"If anything, it reinforces this narrative that Canada needs to use the levers under its control to take advantage of some of these broader shifts we're seeing globally," Burleton said.
What worries him is what happens when that pressure comes off.
"One of the things, when we went through the Liberation Day, that for a few months we were in real crisis, weren't we," he said. "You were actually getting a real push. It was a fairly short window, but as usual, when the crisis settles, this is when it gets tough again."
He points to interprovincial trade as an example. Meetings were convened immediately after the tariffs landed. There was movement, he says, no doubt. Then things died down.
"I think it becomes harder when the economy isn't in severe recession or not in crisis," he said. "It's been more resilient. So again, somehow we've got to keep governments' iron to the fire to keep forging ahead with movement."
One thing he says is different this time.
"What I like about [Prime Minister] Carney, [he] set some targets, and I like the fact he is more willing to set these longer-term targets for investment," he said. "At least there's some kind of accountability around commitments. And then if they don't meet it, then they have to do some soul searching as to why it didn't happen."
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According to TD's report, project spending and the benefits of a potential supercycle would initially be concentrated where the energy and resources are. Nova Scotia leads by a wide margin relative to the size of its economy, followed by the territories and Alberta. While Ontario is fourth by project count, it's well down the list once you adjust for the size of what it already produces.
Burleton points out, however, that supercycles don't stay concentrated for long, and that’s where Ontario and the Toronto region will see residual benefits.
"Supercycles generally involve a breadth of growth," he said. "It may start in one part of the country and then you do tend to see ripple through."
Toronto's advantages are the ones that matter in the second wave. Somebody finances these projects. Somebody engineers them, insures them, writes the contracts, and runs the head offices. The region has scale, skilled workers, and financial depth few places in the country can match, plus critical minerals of its own in the north and trade relationships with Europe in sectors like defence.
"Ontario has a lot to offer, clearly a big market, a lot of skilled workers," Burleton said.
What he does say is that the burden of creating the right conditions falls harder here, precisely because the projects aren't landing in the same volume.
"That notion that governments have to be bold applies in particular to a province like Ontario," he said, "where it doesn't benefit from the energy that Alberta does."
That means all three levels of government must be pointed the same way, something Burleton says matters most in a city like Toronto.
"Every city is obviously different, and the City of Toronto has its own array of big-city challenges that many don't face," he said. "So even more important for the City of Toronto to be right up there with other levels of government in kickstarting this potential for a super cycle."
This is the second part of a two-part series. Read part one here
