Bay Street strategist, Jim Thorne, says Canada should be one of the ‘wealthiest nations’ but ‘we got off-track’ — here's why

Need to know

• Strategist Jim Thorne says Canada’s slow project-approval process, not interest rates, is the bigger drag on wealth.
• He publicly expressed his concern after the Bank of Canada held its overnight rate at 2.25% for the seventh straight decision.
• The focus on interest rates occurs south of the border, as well, with Federal Reserve Chair Kevin Warsh pushing for lower U.S. rates.
• Lower U.S. rates could ripple into Canadian borrowing costs.
• Thorne’s warning means Canadians shouldn’t count on a near-term interest rate cut.

Why is Thorne critical of the focus on interest rates?

Thorne made these comments the same morning as the September Bank of Canada (BoC) interest rate announcement — when the BoC held its benchmark rate at 2.25% for a seventh straight decision — a decision that economists had almost unanimously expected.

Thorne addressed the current lack of interest rate relief, clearly stating that Canadians shouldn’t expect the wait to end any time soon. He expects the same wait-and-see message from BoC Governor Tiff Macklem at the Bank’s next rate announcement on October 28.

“I think the governor is going to be on hold and … in a wait and see mode,” he said, adding Macklem will want to “evaluate the data” tied to the trade war with the U.S. before moving again.

And Thorne doesn’t agree with this wait-and-see approach. Instead, Thorne argues that Canada needs to lower interest rates in order to offset an economy that is less diversified than the U.S. — but he doesn’t expect that relief soon.

For most analysts, including Thorne, rate relief is not expected to come until well into 2027.

The ‘off track’ diagnosis: Red tape, not resources

For Thorne, the biggest issue isn’t rate relief but structural delays. According to Thorne, the bigger problem facing Canada is how slowly Ottawa lets the country’s real advantage, its natural resources, actually pay off.

He points to Canada’s parliamentary system as creating “inertia in Ottawa that slows down the approval process,” layering on “too much regulation” just as global capital looks for a home.

Thorne’s observations appear to be backed up with Ottawa’s own response to the current tumultuous nature of trade relations with the U.S. In 2025, the federal government launched the Major Projects Office, which is meant to compress approval timelines for the mines, ports and energy corridors that once took a decade or longer to clear.

While Thorne says this is a step in the right direction, he is skeptical that the new Office (and focus) will alleviate the sluggish pace of approvals.

“Mines just don’t come overnight,” he said. “Pipelines aren’t built overnight. And we’re still in the planning and presentation phase.”

For Canadians, Thorne’s observations aren’t abstract concerns. Slower project approvals mean slower job creation in resource regions, less business investment showing up in economic growth, and — in Thorne’s view — a Bank of Canada with less room to cut rates because growth still leans too heavily on public-sector spending rather than private investment.

Thorne is still bullish, but with a cautionary tale

In general, though, Thorne remains bullish on Canada’s economic growth. He points to AI-driven data-centre spending and a structural shift in energy markets — including a reported multibillion-dollar Chevron deal in Venezuela — as evidence of real profit, not just hype, showing up.

But this positive momentum comes with a few red flags. Thorne points out that debt tied to AI investment is increasingly being securitized — a situation that is similar to the 2008-2009 U.S. housing market correction. He points out that securitization was the mechanism that turned a housing correction into a systemic crisis, and that mechanism is now fuelling AI financing. As a result, the debt that is helping finance AI is now spreading it to a broader pool of investors, just like mortgage debt — and all the risks involved with this type of debt — were spread across investors in the years before 2008.