Canada: Wake the F Up and Get Out of Your Own Way

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Canada should be one of the most dominant economies in the world. We have an unparalleled combination of natural resources, skilled talent, political stability, and access to global markets—advantages that most countries can only dream of. Yet despite this foundation, our economic performance has materially lagged our global peers, with weak productivity, declining investment, and mounting government debt. We exist to support the risk-taking business owners who are working hard to build up Canada so our kids can have a better future.

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‍Key Takeaways this Month:

• Canada is Underperforming – and It’s Structural: Canada’s economic weakness is not cyclical -it’s structural. GDP per capita has grown just 0.5% annually since 2015 while private investment has fallen 26% and debt per capita has surged 71%, highlighting a clear misallocation of capital and wasteful government policies.‍
• But Canada Is Built to Win: Despite underperformance, Canada remains one of the most structurally advantaged economies globally - with leading positions in energy, agriculture, and critical minerals that the world increasingly depends on. The opportunity is not hypothetical - it’s already in place, but underutilized.‍
• Limited Risked Capital Providers and a Culture of Risk Avoidance is Killing Growth: Canada doesn’t lack capital - it lacks risk capital and risk tolerance. Risk averse banks dominate the Canadian credit market and focus on non-productive real estate creating an opportunity for Diamond Willow to unlock growth where we can have the greatest economic impact.
  

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DIAMOND WILLOW LENDER’S NETWORK

We see a structural gap in risk financing across Canada – this is where Diamond Willow operates. Our curated network of lenders allows us to match companies with tailored solutions to finance scaling, acquisition, or turning around.

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Canada Has What the World Needs, but Government Policy and a Lack of Capital Is Mitigating Progress

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At a time when the world is grappling with energy security, food shortages, and supply chain fragility, Canada should be indispensable. We have what the world needs: energy, food, critical metals/minerals, and key inputs. Layer in abundant fresh water, clean power potential, and a highly educated workforce, and the case becomes clear: few countries are as structurally advantaged as Canada, but we aren’t doing enough with it.

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CANADA EXPORTS AS PERCENT OF GLOBAL EXPORTS

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KEY ECONOMIC VARIABLE CHANGES, 10-YEARS

‍Canada’s global importance is clear, yet over the past decade our economy has significantly underperformed thanks to wasteful government policy and a lack of risked capital.

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Canada’s lending market is large - but not built for growth. With over $5 trillion in outstanding debt, capital is heavily concentrated within the oligopoly of the big 6 banks, which prioritize low-risk, real estate backed lending. Private credit can fill some of the gap but with only 1/3rd of the banks capital available for commercial endeavors Canada needs to open the door for new investors and be competitive on a global scale.

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HOUSEHOLD & NON-FINANCIAL CORPORATION CREDIT

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BIG 6 LOAN BOOK COMPOSITION

Banks, credit unions, and government agencies provide 70% of Canada’s debt capital but prioritize security over growth and have limited capacity for flexible, cash flow-driven or riskier financing. Canada needs to break the oligopoly and access risked capital in order to prosper.

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Source: OECD, IMF, Statistics Canada, Department of Finance Canada, the Observatory of Economic Complexity (OEC), The World Bank, USDA, World’s Top Exports, Earnings Reports, Diamond Willow

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All the Ingredients for Greatness But None of The Drive to Make it Happen

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It is a travesty that Canada can not find a way to create abundance for all citizens due to political differences, wasteful government policies, and a lack of risk tolerance. We have everything the world needs, at a time when the world needs it most.

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Diamond Willow’s Greatest Impact is in the Mid Market

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Diamond Willow is focused on having the greatest positive impact net to Canada. With millions of small companies (revenue up to $25M) but only thousands of mid market companies (revenue of $25M - $150M) Diamond Willow focuses on supporting mid market companies to help build up Canada.

Our financings often enable a doubling of economic impact and completing just 17 mid market financings a year would add $250,000,000 to the Canadian economy.

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Large caps dominate today's GDP —but mid market is where outsized growth lives.

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OUR COMMITMENT: A small team with a $50M-per-professional GDP-growth target —easily met by completing 7 mid market financings per year. We are growing, and so is our contribution to Canada.

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Source: Statistics Canada, ISED, Diamond Willow

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Canadas Economic Demise

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Over the last decade Canada has seen massive government spending, trillions in debt growth, unprecedented deficits, material population growth but this spending and money printing has not translated into GDP growth or productivity. We are on a slippery slope to global irrelevance and need to quickly change course for the betterment of all Canadians and future generations.

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G7 GDP PER CAPITA

Canada is falling behind its G7 peers, with GDP per capita growing just 1% per annum since 2015 – roughly one-third the pace of the G7 average (ex. Canada) of 2.8%

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PRIVATE NON-RESIDENTIAL INVESTMENT PER CAPITA

Private capital investment isn’t just fleeing – it’s flying (away from Canada). Private non-residential investment in Canada is down 26% since 2015, while the US is up 42%

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LABOUR PRODUCTIVITY, GDP PER HOUR WORKED

Canada’s labour productivity has lagged relative to the US post-COVID, but has notably only grown by 7% over the last decade (compared to 22% in the US)

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Source: International Monetary Fund, Statistics Canada, FRED, Diamond Willow

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CANADIAN HISTORICAL FEDERAL DEFICIT

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HISTORICAL GROSS FEDERAL INTEREST-BEARING DEBT BALANCE

Canada’s unchecked deficits (most recently printed at -$67B for FY2025) have ballooned the national debt to approx. $1.8B – but for all this spending, GDP growth has been underwhelming at best

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HISTORICAL GOVERNMENT EXPENSES

The cost of government has increased by 85% since 2015 and is projected to reach $651B by 2030 (an increase of nearly 20% from current levels). Public debt charges account for approximately 10% of the current national spending plan.

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Source: Department of Finance Canada, Statistics Canada, Diamond Willow

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CANADA GDP PER CAPITA & DEBT PER CAPITA

Over the past decade, Canadian GDP per capita has grown by 4.7% while debt per capita has grown by 71% proving Government spending has not delivered benefits for Canadians

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CANADA INFLATION (ALL ITEMS)

Canadian CPI inflation remains hot, hot, hot with the latest print at 2.7%, which is above the pre-COVID average of 1.7% (2015-2019)

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Source: Department of Finance Canada, Statistics Canada, FRED, Diamond Willow