Federal Liberal leadership candidate Marc Garneau speaks at the Hilton in Toronto on Wednesday, Dec. 12, 2012, at an event held by the Economic Club of Canada. (Dave Thomas/Toronto Sun)

TORONTO — Canada's economy is failing to meet its potential, federal Liberal leadership candidate Mark Garneau says.

The Quebec MP laid out his economic vision for Canada at an Economic Club of Canada luncheon on Wednesday.

"We must strike at the heart of structural challenges facing our economy. We must entice and reward private investment in innovation. In doing so, we will empower the private sector, not the government, to drive Canadian innovation," Garneau said.

"We can no longer afford to tinker around the edges. We must face our challenges."

Garneau stressed that Canada needs to focus on improving its productivity and innovation record and invest in workplace skills and tackle the high youth unemployment rate.