Opinion: Growing Canada’s economy requires investing in people, not just projects

The author argues Canada should pivot fiscal priorities from capital-focused infrastructure projects toward workforce investment in meta-skills that drive innovation, noting Prime Minister Mark Carney’s emphasis on hard sciences and big projects. Citing a 3,000-person study, 81% completed training in the past year but only 32% found it useful for their job and 59% have left or considered leaving due to training gaps; employer-sponsored training averages just $240 per employee per year (inflation-adjusted), among the lowest in the OECD, while turnover can cost 50–200% of salary. The piece warns that underinvesting in human capital risks undermining returns on large public investments and Canada’s ability to retain talent and capture long-term productivity gains.

Analysis

Market structure: A sustained shift from capital-intensive “build-big” spending toward workforce investment reallocates durable demand away from heavy-equipment and construction (revenue growth pressure for CAT, FLR, J) into services and platforms that sell training, upskilling and workforce deployment (EDTECH: COUR, CHGG; HR tech/payroll: ADP, PAYX; staffing: MAN). If employer training spend moves from the current ~$240/employee to $400–1,000/employee over 2–5 years, addressable revenue pools for learning platforms and staffing could expand 2x–4x relative to current baselines.

Risk assessment: Tail risks include a policy U‑turn favoring infrastructure capex (boosts CAT/FLR) or a recession that cuts discretionary corporate L&D (reduces EDTECH revenue) — both >10% probability next 18 months. Immediate market impact is limited (days), expect material reallocation in 3–12 months as fiscal budgets and corporate FY2026 plans are set; multi-year productivity payoff (>2 years) is required to validate valuation rerating. Hidden deps: training adoption needs measurable ROI/KPIs and tax incentives to scale; without those, churn and low course completion (current data shows only 32% useful) will cap growth.

Trade implications: Direct long bias to high-quality EDTECH and HR-service compounders (COUR, CHGG, ADP, MAN, ACN) and selective reduction in pure-play construction/equipment exposure (CAT, FLR, J). Options: prefer 9–12 month call spreads (buy 20–30% OTM, sell 60–70% OTM) to express adoption acceleration while financing premium. Pair trades: long COUR (or CHGG) vs short FLR/CAT expresses relative reallocation of corporate budgets.

Contrarian angles: Consensus may overweight headline infrastructure wins; market underprices intangible human-capital returns that compound over years and reduce employee turnover (savings 50–200% of salary). Historical parallel: post-2008 investment in workforce tech delivered outsized long-term margins for platform leaders; unintended consequences include wage inflation and margin pressure for SMEs if training bids drive wage competition.

Key Decisions for Investors

• Establish a 2–3% portfolio long in Coursera (COUR) and a 1–2% long in Chegg (CHGG) within 1–3 months — thesis: increased corporate L&D budgets; target 40–60% upside in 12 months, stop-loss 25%.
• Reduce exposure to heavy-equipment/construction names by 3–5% (e.g., pare 1–2% CAT and 1–2% FLR) and redeploy into 2% ADP and 2% ManpowerGroup (MAN) for durable cash-flows from payroll/placement and staffing services; hold 12–24 months.
• Implement an options collar to express asymmetric upside: buy 9–12 month call spreads on COUR (long 20–30% OTM call, short 60–70% OTM call) sized at 0.5–1% notional to limit premium while targeting adoption-driven re-rating; roll if training spend surveys exceed +10% QoQ.
• Prepare to increase EDTECH/HR allocations by another 3–5% if one of these catalysts occurs within 60–180 days: (a) Canadian/US budgets announce ≥$2bn dedicated training subsidies, or (b) ≥10% of S&P 500 companies disclose FY2026 L&D budget increases — otherwise cap exposure and re-evaluate.