Five years after the World Health Organization declared COVID-19 a global pandemic on March 11, 2020, Canada now faces a new challenge - unprecedented economic pressure from its closest trading partner, the United States.

Canadians are once again being forced to confront the country's economic vulnerabilities. While the pandemic underscored the economic importance of place and social connections, economic aggression from the U.S. highlights the need for greater local autonomy.

Canada needs a new approach to economic development. Yet, as the government searches for solutions to bolster "Team Canada," policymakers risk falling back on the same tired strategies: corporate bailouts, tax breaks for big business and top-down stimulus.

This played out during the pandemic. Policies favoured large corporations, leaving small businesses and workers struggling, despite their critical role in economic resilience. This time, Canada needs to do things differently.

For Canada to build a more resilient economy, it must strengthen its communities by securing local assets, democratizing the economy and ensuring wealth circulates within communities rather than being extracted by distant, corporate interests.

A promising solution lies in community wealth building, a local-first approach to building the economy that emerged in the early 2000s. This approach offers a tonic to current economic policies that concentrate wealth into the hands of a small group of individuals, leaving communities vulnerable.

By prioritizing more inclusive and democratic ownership, investment and decision-making, community wealth building empowers communities to take control of their economic future. The strategy moves away from the current extractive economy, which prioritizes the exploitation of land, resources and people, toward one that builds wealth from the ground up.

The Democracy Collaborative's community wealth-building framework offers five pillars for building strong local economies. These include progressive procurement, locally rooted finance, inclusive and democratic enterprise, fair work and the just use of land.

Many communities across Canada and globally are experimenting with one or more of these pillars. For example, social purpose organizations are experimenting with locally rooted financial instruments that flow profits back into their mission.

In Canada, community bonds allow social purpose organizations to raise capital from their community members to finance projects that benefit communities, such as affordable and green housing and regenerative food systems, among many others.

When locally rooted finance is combined with just use of land, and inclusive and democratic ownership, these initiatives can ensure wealth-generating assets - land, housing, infrastructure and businesses - stay in the communities so more people benefit from economic development.

Canada has a history of inclusive and democratic enterprise, with many co-operatives and social enterprises owned by charities and non-profits. Now, Canadian businesses also have the option of transferring ownership to employee ownership trusts.

The diversity of ownership options challenges the false choice often presented when local businesses face closure: either shut down or be "saved" by an extractive investor.

Despite these positive developments, many community wealth building projects in Canada continue to exist as one-offs and sit on the margins of mainstream economic development policy. Local projects challenge the status quo and, as community-led projects, can struggle with governance and access to financing.

The federal government, non-profits and businesses all have the opportunity to shape a more resilient economic future for Canada by putting local businesses and local ownership first. But to transform local economies, action is needed across all five community wealth building pillars.

Through our research on community bonds, community wealth building in mid-sized cities and community ownership, we have suggestions for how Canadian governments and businesses can help communities understand what strategies work, and how they can adapt and scale them as needed.

Real progress in this area requires action from all levels of government, as well as from policymakers, businesses and community leaders.

As experience from Scotland and the U.S. shows, ground-up initiatives must be met with government support in the form of innovative policies, action and investments.

In practical terms, this means aligning government procurement policies and partnerships with local initiatives for new businesses, introducing legislation that supports inclusive and democratic ownership, and building wealth from local assets rather than importing it.

Local governments should commit to embedding community wealth building into their economic development planning. This is not a stretch, as many already support local business and entrepreneurship. The key is expanding on these efforts.

For instance, both large cities like Toronto and coalitions of smaller local governments are using their purchasing power to buy goods and services from suppliers that strengthen the local economy.

At the federal level, policy innovations like community right-to-buy legislation and related supports could give workers and communities the time, financing and expertise to compete with extractive investors and retain wealth and assets.

By investing in community wealth building, governments can help shift economic power, build Canada's economic resilience and ensure communities have agency in shaping their economic futures.