Introduction
Canada’s proximity to the United States has long masked structural weaknesses: sliding productivity, tepid business investment, and a shrinking innovation edge. The promises to “fight for Canadians” ring hollow if the numbers continue to trend in the wrong direction. In this environment, paper-only wealth is fragile. Tangible stores of value, gold and silver, move from “nice to have” to “household basics.”
The Productivity Crisis: From Stagnation to Regression
- Three straight down years, then only a faint pulse: Canadian business sector labour productivity fell 1.8% in 2023, the worst in the OECD, capping three consecutive annual declines. In 2024, it finally ticked up by 0.6%, but from a lower base.
- Multifactor productivity is negative: MFP fell 1.7% in 2023, a classic sign of weak efficiency gains.
- The gap with the United States is now a chasm: RBC pegs Canada roughly 30% less productive than the United States, worth about 20,000 dollars per person per year.
- Bank of Canada alarm bells: Senior Deputy Governor Carolyn Rogers said, “It’s an emergency. It’s time to break the glass.” Weak productivity makes inflation harder to tame without punishing rates.
The Most Recent Data (August 2025) On Productivity – StatsCan
Canadian corporate operating profit was $190.9B, down $3.2B (-1.7%) from Q1, up $2.9B (+1.6%) year over year. The drop came from non-financial industries; financials posted a modest rebound. Source: Statistics Canada, Table 33-10-0226-01, released Aug 25, 2025.
- Non-financial profit fell to $100.8B (-$4.0B, -3.8%), with declines in 13 of 39 industries.
- Oil & gas extraction plunged $2.9B (-26.2%) on lower crude prices, weaker exports, and wildfire-related shutdowns.
- Pipelines down $283M (-17.3%) after a U.S. rupture forced a temporary shutdown.
- Manufacturing profit dropped $2.0B (-8.9%) to $21.0B.
- Petroleum & coal products: -$1.8B (-38.1%) on lower refined product prices and refinery outages.
- Motor vehicles & trailers: -$611M (-70.0%), tied to uncertainty around new U.S. tariffs, partial plant shutdowns, lower production and -5.4% operating revenue.
- Banking/depository credit intermediation: -$566M (-2.1%) as provisions for credit losses jumped 30.6%, only partly offset by a +1.2% lift in net interest income.
Investment Drain and the Nearshoring Miss
Friendshoring is here, and Mexico is scooping the winnings: record Foreign Direct Investment (FDI) of US$21.4B in Q1 2025 and US$34.3B in H1, with manufacturing capturing ~36%, driven mostly by reinvested profits (~84%) even as new investments topped ~US$3.15B. Gobierno de MéxicoEl FinancieroEl País By contrast, Canada’s capital formation is mixed at best: business investment in non-residential structures fell 1.6% in Q1 2025, while machinery & equipment (M&E) rose 5.3%—but the OECD still flags Canada’s M&E intensity as low vs. G7 peers, a chronic drag on productivity. Statistics CanadaOECD Unless we overhaul incentives and competitiveness, permitting speed, power costs, and M&E write-offs, we’ll keep missing the realignment.
Youth Employment: A Pressure Cooker
This is not abstract; it is generational. In July 2025, Canada lost 40,800 jobs, and youth unemployment reached 14.6%, the highest since 2010 outside the pandemic years. The youth employment rate fell to 53.6%, the lowest since 1998 outside the pandemic.
Competition Is Thin, and That Hurts Productivity
A two-decade study by the Competition Bureau found a decline in competitive intensity between 2000 and 2020 across concentration, markups, and firm entry. Telecom and services stand out, and the findings reinforce the productivity slump. It has only gotten worse since the onset of COVID-19.
Beyond Traditional Tools: The Case for Gold and Silver
When policy, demographics, and geopolitics pressure fiat assets at the same time, physical metals shine for three reasons.
- Diversification that works when it is needed. Gold’s correlation to risk assets often goes negative during selloffs. In the global financial crisis, it rose while most diversifiers fell. Independent studies show that allocations of about 2.5% to 10% have historically improved risk-adjusted returns and reduced drawdowns. Silver is like gold, but imagine it as a steroid user. Its gains are that much more dramatic.
- Persistent, policy-agnostic demand. Central banks have been net buyers for over 15 years. Gold set more than 40 all-time highs in 2024 and pushed above $3,000, almost to $3500 US dollars per ounce in 2025 as geopolitical and rate path uncertainty persisted.
- Both Gold and Silver are up over 28% in 2025 alone, and it is only the end of August.
- Structural tailwinds for silver. Industrial silver demand set a record in 2024 on the back of solar PV, electrification, and advanced electronics. The market remained in deficit for a fifth straight year. This puts our prediction for silver in 2026 closer to $52, at peak.
Long run performance snapshot in US dollars:
- Gold: roughly a tenfold move since 2000, from below 300 dollars per ounce to above roughly $3365 as I pen this article.
- Silver: from mid 2010s levels around 15 to 20 dollars per ounce to the mid 30s by mid 2025, up roughly 120% to 160%, with higher volatility than gold. Current;y sitting around an average price of $38.75 USD spot.
A Blueprint for Canadian Economic Agency- What I think we need to have happen.
- Reframe the narrative. Target productivity through capital deepening, technology adoption, and competition reform.
- Mobilize the young. Pair budgeting with tangible asset literacy. Explain why a portion of savings should live outside the financial system and in assets like gold and silver.
- Sharpen policy. Incentivize research and development, infrastructure, and competition, and reduce regulatory friction in high potential sectors.
- Elevate real axis wealth planning. Banks and planners should include physical metals alongside traditional mixes as part of resilience planning. Delta Harbour plans to lead Canada in this area.
Why Physical AU and AG, and Why Through Delta Harbour in Canada
Direct ownership versus paper exposure: With physical bullion, you own a bar, round or a coin, not a promise. This reduces counterparty and tracking error risk that can creep into paper products.
Tax and account mechanics in Canada:
- Registered Account eligibility: Investment grade bullion that meets CRA purity rules can be held in registered plans when sourced and stored with approved custodians and you can utilize existing accounts at other institutions to do this. You already have the funds if you're already a holder of any registered account.
- GST and HST: No GST or HST on qualifying precious metals that meet the CRA definition. Non-qualifying items, such as collectibles, scrap, and lower purity silver and gold remain taxable.
Storage and liquidity you can point to:
- Insured, segregated vaulting with institutional operators in the Greater Toronto Area provides auditable holdings, serial numbered bars, and institutional-grade custody with the right to audit your holdings.
- Professional logistics with carriers like Brink’s, Malca Amit, or Loomis support secure in and out flows when you need to sell, deliver, or rebalance.
- Liquidity is a phone call away.
How we position clients at Delta Harbour:
- Target allocation: Many analysts suggest starting with 10% to 20% of investable assets in metals, then dial up or down by risk tolerance and time horizon based on your conversation with those you trust. Many clients prefer a gold anchor with silver torque.
- Example mix for balanced resilience: 60% gold and 40% silver by value in registered and non-registered accounts for diversified shock absorption and pro-cyclical upside. Move to 70% gold and 30% silver if volatility sensitivity is high. This is illustrative, not advice.
- Format and form factors:
- Gold: one ounce LBMA-accredited bars, coins, or rounds for liquidity. Consider larger bars for lower premiums per ounce.
- Silver: 100-ounce, 10-ounce and one-kilogram bars for liquidity and storage efficiency. Avoid collectibles in registered accounts.
- Where it sits: Segregated, insured vault storage with online statements and bar lists.
- How you exit: Sell by phone directly from the vault and settle proceeds, or request delivery through insured logistics. You do not need to ship from home or wait for a cheque. Prearranged liquidity is faster and cleaner than doing it yourself in stressed markets.
The Final Word
Canada cannot coast on the United States' momentum forever. The math is blunt: weak productivity, soft investment, and battered youth outcomes, with thin competition compounding it all. A recession in Canada is a stepping stone away. Gold and silver will not fix policy, but they harden household balance sheets against currency, policy, and market shocks. That is sovereign economic agency at the family level. The national turnaround is a marathon. Your resilience plan can start today. Just call or email Delta Harbour anytime.
Yours to the penny,
Darren V. Long
