Charles Emond’s Speech at the Chamber of Commerce of Metropolitan Montreal: Change waits for no one

Hello everyone,

And thank you to the Chamber of Commerce of Metropolitan Montréal for the invitation.

Today, I’m going to talk about the United States and artificial intelligence. That’s right—two topics everyone’s been talking about for the past 18 months.

But I hope to show you a slightly different perspective and share some ideas to consider together what the future might hold.

With over $500 billion in assets across 70 countries—including $100 billion in Québec—La Caisse is in a unique position. One that allows us to understand Québec’s economy and its place in the world. And what’s happening elsewhere.

I have two main topics I’d like to discuss: 

First, putting the current situation into perspective. There’s our trade relationship with the United States, obviously. But also—and perhaps most importantly—there’s the rise of artificial intelligence. And the impact these both have on our economy.

Second, I’d like to propose a few actions we can prioritize to help us to succeed in these conditions.

Background

On the first topic, some context: we know Québec and Canada are going through a challenging economic period. A perfect storm fuelled by both the redefinition of our relationship with the United States and the AI revolution. And to make matters worse, we’re particularly ill-prepared to deal with this situation.

When it comes to the U.S., there’s a lot of talk.

But there are two important points we all have to understand if we are to take the necessary action.

1. What we export to the United States can’t be easily sold to other countries.
2. Our exporters have a lot of ground to cover if they want to sell to markets other than the United States.

On the first point, I think we need to look beyond tariffs—and yes, I’m aware that Québec is particularly hard hit, with a 7% average tariff, twice as high as the Canadian average of 3%.

But the reality is that nearly 70% of what we export to the United States consists of intermediate materials that are used in American supply chains.

That’s a lot more than other countries.

We sell materials or resources that U.S. companies turn into finished products.

Canada and the United States are not traditional trade partners; they are co‑producers. An integrated relationship unlike any other in the world. An advantage. Until one of the co‑producers decides they no longer want to co‑produce.

Shifting all of this co-production to Europe or Asia overnight, as other countries have done to avoid U.S. tariffs, is no small feat.

It will take higher productivity to stay competitive with our main partner. AI offers us a historic opportunity. I’ll come back to that in a moment.

On the second point, there’s an important fact to keep in mind: two thirds of Canadian exporters only sell to the United States. A nearly 25‑year record high. This means that many of our companies would have to start from zero to sell in other markets.

Which is not at all the same as deciding to sell more in a market you’re already in. It takes time and money. It’s a long and difficult road.

So, yes, developing new markets is absolutely essential. And we support that effort. In fact, I was in Europe a couple weeks ago to do just that.

But we need to understand that we have a long way to go.

Several countries are compensating—even more than anticipated—by selling their goods outside the United States. So far, the figures show that this is not the case for Canada.

The other critical issue is AI. There’s a lot of talk about it—sometimes positive, sometimes negative. Today, I want to take a step back and suggest we resist the temptation to downplay this revolution.

AI is the first invention that’s not a machine. It’s an agent that tackles non-routine cognitive work.

An agent that is given instructions and does the work for us.  To the point where today’s systems are improving, correcting themselves and writing 80% of their own code.

It’s not just something we’ve never seen before. It’s something that’s moving faster than even the experts predicted.

Unfortunately, we’re not at the forefront. Look at Scandinavian countries, with whom we can and like to compare ourselves. After just a few years, our companies have adopted AI at half the pace of theirs—19% compared to about 38%.

If we play our cards right, AI could be a historic opportunity to close our chronic productivity gap, particularly with U.S. companies. Or our hesitation could also mean we widen the gap.

Zooming out a little, I’d like to address the situation Canada and Québec were in before the current crisis.

Between 2015 and 2024, Canada saw a major decline in business investment. An RBC report shows that this is the first time this has happened since the Great Depression, a century ago.

Canada ranks last among G7 countries in terms of investment in equipment, machinery and intellectual property. Québec is below the Canadian average. Canada’s GDP has fallen three times over the past four quarters.

It’s not a question of whether or not we’re in a recession. It’s that we know we’re stagnating.

We’re not the only ones in a difficult situation. Most Western countries are facing economic difficulties. Small populations. Significant debt.

But we are more dependent on the United States than other countries are. And more behind in terms of technology.

We’re going to have to face the facts and have the courage to make a shift. A major shift.

Governments have a role to play in turning the tide. But today, I want to address the business community in particular. It’s you—us—who will need to be the driving force that propels Québec forward.

For a long time, our instinct has been to wait for governments to take the initiative. But it’s not subsidies or non-market financing that should or will bring these projects to fruition. Governments must promote the growth of all companies. And companies must launch projects that will be financed under market terms.

A week after the United States imposed tariffs on Canada, La Caisse announced a support program for companies that wanted to adapt to the situation.

We offered the capital necessary to launch projects immediately.

We offered expertise in just about every area you can imagine.

We offered our networks to open up new markets.

We didn’t receive a single eligible application.

And that’s what worries me. Our own inertia and our reluctance to adapt to a changing world. We need to stop protecting the business of the past and start building the business of the future.

Priorities

There are a number of priorities that we should focus on. I’m going to talk about five.

First, we need to have the courage to make choices. We need to identify the sectors where we could stand out on the global stage. Sectors that serve the whole world’s needs. Where Québec and Canada have a real competitive advantage and where we can be major players on a commercial basis.

We can see five or six: energy and materials, defence and aerospace, and artificial intelligence. Spreading ourselves thin across thousands of comprehensive programs takes resources and time that we just no longer have. It’s going to take strategic focus and swift, disciplined execution. These are the champions that will be able to sustain the industrial ecosystems of SMEs that will spring up around them.

Second, AI. Two weeks ago, the federal government released a strategy that set a goal for 60% of Canadian companies to have integrated AI into their business operations by 2034.

It’s good to set goals. But in today’s world, and given how far behind we are, eight years seem like an eternity to me. Several countries are already way ahead of us. We absolutely must aim higher—and faster—than a 5% adoption rate per year.

This also means that our universities need to better prepare our young people for today’s world by incorporating AI into all their programs. That they train our students for new professions and help them develop expertise, not just skills.

And that we educate our workers—quickly. So they understand how their jobs will change. To show them what skills will be required. And prepare them accordingly.

Third, we need to work better together—and that means we aren’t all doing the same thing. We need to do different things. Everyone plays their own role. If we learn how to do this, I’m convinced that there’s a way to maintain existing infrastructure and finance major new projects—both of which are urgent and critical to our productivity.

So how do we do that?

Three possible solutions:

1. We can do what’s known as asset recycling, or as they say, “putting the right dollars in the right place.” Stabilized government assets are transferred to investors such as La Caisse or others who have the means to maintain and improve them. Governments can then redirect the proceeds from the transaction to other public interest projects. Programs like this exist and are successful in places like Australia, the United Kingdom and India. It takes social acceptability for partnership-based models, and we have some work to do to explain them better.
2. Governments can also partially derisk from projects in order to attract private capital—even during the construction phase—without having to invest themselves. La Caisse recently did just that by working for two years with the U.K. government on the Sizewell C nuclear power plant construction project. This was a world-first for an institutional investor, and it enabled the country to strengthen its energy security. The government assumes certain risks, while the investor assumes others. A division that allows everyone to play their part here as well.
3. There are other approaches as well—such as transferring risk to investors in exchange for a priority return. This lets governments move projects off their balance sheets. La Caisse has done that, too.

The point here is not to get into technical details, but to show that solutions exist and that we should implement them here as well. We just need to think outside the box. We know it’s done elsewhere.

There are ways to protect the public interest while partnering with private-sector investors and companies.

Fourth, we need to regain our appetite for risk. Our ability to pick ourselves up after a failure, rather than giving up entirely on everything we’ve tried that didn’t work.

Between 2015 and 2024, the entrepreneurship rate increased by 34% in the United States. It rose 40% in England. It was up 86% in France.

In Canada? No increase.

And in Québec, the entrepreneurship rate is half that of the rest of Canada. This places us among the three weakest regions in the OECD.

Some solutions undoubtedly involve taxation.

Offer greater incentives at the startup and investment stages, rather than at the time of sale, when the risk has disappeared.

Extend the recent accelerated depreciation measure for business investments beyond 2030 to make our companies’ projects in North America as—or even more—profitable here as they are in the U.S.

And the list goes on.

But it’s not just about taxation. We need to create and nurture a whole culture of innovation and entrepreneurship. Learn from our failures—not to avoid repeating them, but to try again, and do it better.

Lastly, we have to stop waiting for the storm to pass. Stop hoping for a return to normal.

Yes, the 2008 financial crisis did come to an end—with regulation and a bailout. The pandemic also ended, thanks to vaccines and unprecedented government spending.

But what’s happening now is different. Whether we’re talking about U.S. protectionism or the rise of AI, this trend is here to stay. There will be no ending. Just a new normal.

Inertia is not an option. And as we witness all this, change waits for no one. If we don’t deliberately and confidently rise up to meet the changing global economic landscape, others will. And they’ll come out on top.

Our culture of prudence served us well in the past. During the 2008 crisis, Canada was recognized for taking fewer risks than other countries and faring better as a result. But right now, that instinct for caution is working against us.

We need to stop talking about change and actually do it.

Conclusion

My hope for La Caisse is for people to see us as more than a piggy bank. A charming image, but one that reflects the collective caution that characterizes us.

La Caisse protects Quebecers’ savings—absolutely. But this isn’t money that’s just sitting there, hidden under a mattress, waiting passively.

It’s much more than that. La Caisse is one of the largest property owners in the world. With access everywhere. An active investor that even develops its own projects. That drives local businesses forward. The global fund most invested in its local economy.

We have a unique dual mandate: to generate commercial returns to ensure the financial security of our depositors while building Québec’s economy. Tomorrow’s economy.

It’s a role model for our time, and the envy of every leader and head of state I meet.

A time when financial returns can no longer be separated from socioeconomic progress—even more so in this new world order.

With our resources, expertise and networks, we can help shape Québec’s industrial landscape for the 21st century.

But we can’t do it alone. There are nine million of us. We have more than $500 billion. We need to act. And we need to do it now.

Thank you.