Commentary: Canada’s $1-Trillion Investment Target Risks Falling Into the 'McNamara Fallacy'
A new commentary by Danny Parys warns that Ottawa’s focus on attracting $1 trillion in investment may prioritize quantity over quality, citing a surge in foreign acquisitions of existing businesses rather than new capacity building.
Danny Parys argues that the Canadian federal government’s ambitious goal to catalyze $1 trillion in investment over the next five years risks falling into the "McNamara Fallacy," a concept associated with former U.S. Secretary of Defense Robert McNamara that describes prioritizing measurable quantities over qualitative outcomes. The commentary suggests that focusing solely on investment volume could lead to economic vulnerabilities rather than genuine growth.
According to the analysis, nearly half of the surge in foreign investment observed in 2025 did not stem from new capacity building but from the acquisition of existing Canadian businesses. A prominent example cited is the U.S.-based Sunoco’s purchase of oil and gas giant Parkland, which was financed with US$2.65 billion in debt. Parys notes that such acquisition-driven trends can lead to rampant consolidation, price increases, and declines in service quality, as seen in sectors like veterinary care. Furthermore, saddling local firms with debt does not necessarily drive job or wage growth for Canadians.
The piece highlights concerns regarding economic sovereignty, pointing out that as of 2023, approximately 25% of assets in Canada’s non-financial corporations were foreign-controlled. This figure rises significantly in specific industries; in the wholesale trade sector, 49% of assets are held by foreign entities, while in the oil and gas sector, only 67% of assets remain Canadian-owned.
Critics also point to regulatory gaps, noting that the Investment Canada Act’s “net benefit” test only applies to foreign investments exceeding $2 billion for most transactions. This threshold may allow significant consolidations to proceed without rigorous scrutiny. Meanwhile, the federal government has detailed plans to open Canada’s four largest airports to private investors, a move announced after one day of the Canada Investment Summit, where more than 160 projects were showcased. The commentary concludes that an excessive focus on meeting arbitrary investment targets risks selling off productive assets for little long-term gain.