Canadians seem to have been lulled into a sense of complacency about Canada’s economic competitiveness and our overall performance compared to other industrialized countries. A likely cause is that Canada, as a whole, weathered the global financial crisis relatively well compared to most other countries.

The trouble with this story is that in many parts of the country economic growth in recent years has been anemic. This mindset is problematic because it de-emphasizes the urgency for the federal and provincial governments to focus on economic competitiveness and pro-growth economic policies.

One of the main reasons Canada outperformed other countries including the U.S. after the 2008-09 recession is the boom in a handful of provinces with large natural resource sectors (namely Alberta, Saskatchewan, and to a lesser extent Newfoundland & Labrador). In most other parts of the country, Canada’s economic record was actually quite poor.

For example, from 2010 to 2014 (before the downturn in commodity prices), Canada’s resource-intensive provinces saw average annual per person economic growth (inflation-adjusted) of 2.6 per cent compared to 1.1 per cent in non-resource intensive provinces. And the high growth rates in resource-intensive provinces helped pull up Canada’s overall economic growth rate to 1.4 per cent annually, masking economic weakness in other parts of the country.

Troublingly, most of the poor-performing non-resource intensive provinces including Ontario, Quebec and the Maritimes did little to improve their economic fundamentals or competitiveness even as they suffered through year after year of economic underperformance. Indeed, in many ways some provinces—particularly Ontario—actually made their fundamentals worse during this period through misguided policy choices.

The recent precipitous drop in commodity prices and the ensuing decline in the resource-intensive economies have meant that the economic inadequacies of the other provinces are now much starker. Without the strength of the provincial resource economies, Canada’s national economy looks particularly weak.

This brings a troubling question to the fore: what provinces and regions will drive future economic growth in Canada?

Unfortunately, the federal government and many provinces have not pursued sound economic policies. Indeed, the tax increases, regulatory policies, deficits and mounting debt, and the general anti-business climate introduced in provinces such as Alberta and Ontario, and to a certain extent, the federal government, have meant that Canada and many provinces now have markedly less sound economic fundamentals and are noticeably less competitive.

The negative consequences of such policies—including increased uncertainty for entrepreneurs and investors as well as reduced incentives for productive economic activity—are magnified by the current economic environment.

Canada mustn’t be lulled into economic complacency. With the resource boom over, the country faces new economic challenges. Creating a competitive economic environment for entrepreneurs, skilled labour, and investors is needed now more than ever to drive growth and ultimately jobs, rising incomes, and higher living standards. That means returning to proven policies of balanced budgets, declining debt, prioritized government spending, and competitive taxes.