The Bank of Canada (BOC) continued to talk tough while carrying a diminished policy stick yesterday. With its overnight rate still at 1.25%–10 years since the last recession–there’s no doubt the BOC would like a lot more rate room to cut–they just don’t have it. What they’re left with is hope and confident statements even as Q1 economic growth disappointed at 1.3%–the third consecutive quarter of a sub-2% annualized–amid the weakest household spending in three years. See: Fading consumer leaves Canada’s GDP growth at weakest in two years. While the central bank perennially hopes the country will hit its 2% growth target this year and next, even they expect weaker growth below 2% by 2020.

Canada’s debt-heavy households are pulling in of necessity, just as export growth is slowing on trade tariffs, and our realty sector is entering a much deserved and likely multi-year, mean-reversion period–falling home sales and ownership transfer fees led to a 1.9% decline in real estate investment in Q1–the largest since the first quarter of 2009.

We know which cylinders are not firing well in Canada’s economy today, more challenging at the moment is to tap other cylinders to carry the load. That will take longer planning  with innovation and strategic investment–much harder than just loosening lending standards some more–the go-to fix for every economic weakness over the past three decades. The add more non-productive-debt-game has run its course.

We cannot suddenly make up for years of misguided investment and tax subsidies to antiquated business models, but we can make moves in new more efficient directions. Old habits do die hard, but old dogs can learn new tricks. Case in point: even as federal governments struggle with status quo industry capture, cities all over the world are devising to waste and pollute less, while revamping public infrastructure in ways that will increase efficiency, productivity and quality of life for their citizens.

Smarter, wise management is due for an up cycle. Even the traditionally oil-centered City of Edmonton is getting brighter ideas, see Committee endorses plan to buy 100% renewable energy for city operations.