We no longer inhabit a world where Canada can count on the restoration of unfettered free trade with the United States. That era is gone, and with it the comforting assumption that our prosperity can be secured by access to the American market.
Some will argue that protectionism is cyclical and that trade agreements like CUSMA still anchor stability. But agreements matter less when rules can be bent overnight by tariffs or export controls. Even “stable” trade frameworks can be weaponized. Canada must plan for a world where economic coercion is a permanent feature of the landscape.
This is not to say that trade is dead; a medium-sized economy like Canada’s must remain deeply engaged in global commerce, including with our most important trading partner. But our future depends on two inseparable anchors: economic security and national security. In a weaponized global economy, the two can no longer be treated as distinct.
Meeting this challenge requires a dual focus. The short-term is about managing immediate turbulence. Currently, that means managing U.S. trade coercion, new export controls, and vulnerabilities at home. Addressing regulatory delays on energy projects, diversifying trade, removing barriers to internal markets, and strengthening defence spending are all necessary steps. Encouragingly, the Carney government has begun to signal urgency on these fronts. Yet even if such measures succeed, they will not resolve the deeper long-term need: the task of building the sovereign capabilities and productive capacity that will underpin Canada’s resilience for decades.
That long-term need is defined by competition in advanced industries. Sectors such as energy technologies, aerospace, agricultural innovation, biotechnology, and microelectronics will be central—but they are not the only ones. The real contest lies in how countries harness these industries in combination with general-purpose technologies like artificial intelligence and quantum computing, which cut across sectors and multiply their impact.
As former Google CEO Eric Schmidt’s Special Competitive Studies Project has argued, “innovation power”—the ability to invent, adopt, and integrate technologies at scale—is now the foundation of both prosperity and security. And as former U.S. ambassador to Japan Rahm Emanuel recently wrote in the Washington Post, industrial policy can only succeed if it rests on a deep and sustained base of advanced research. The same principle applies to Canada: Science and research are the foundation of economic power in the 21st century.
Our leading research universities are among the best in the world. They produce highly skilled graduates and cutting-edge discoveries, but too often breakthroughs are scaled elsewhere because we lack a coordinated strategy linking discovery to deployment and research strength to industrial advantage. This is the long-standing failure of Canada’s industrial policy.
The integration of talent, research, and capital is the key. Advanced industries are not only drivers of productivity—they are the building blocks of national security. In an era when cyber tools and autonomous systems are reshaping global defence, Canada cannot remain a passive adopter of foreign technologies. The partnership between Caltech and NASA’s Jet Propulsion Laboratory (JPL) demonstrates how a world-class university, embedded in an industrial cluster and backed by mission-driven public procurement, can generate sovereign capabilities.
Skeptics will note that Canada cannot replicate NASA’s scale—and that is true. But scale is not the lesson. The lesson is alignment. When research strength, receptive industrial capacity, and predictable procurement work together, sovereign capabilities follow. JPL has produced extraordinary space missions, but its broader legacy lies in the spillovers into robotics, advanced materials, communications, and defence.
The creation of BOREALIS, a new defence research bureau announced by the federal government, could be one way to apply those lessons. If designed with ambition, it can serve as a Canadian platform linking research excellence to advanced industries and national security priorities. Done well, it could anchor a new generation of public-private partnerships that build sovereign capabilities in critical technologies while reinforcing Canada’s defence posture.
The urgency extends beyond technology to people. Every major national project we aspire to—whether nuclear power, expanded grids, or AI-driven security—requires vast expertise built up over decades. Talent is not a tap that can be turned on and off. Underfunding postsecondary education and research is therefore self-defeating, and current policies around student visas and immigration are eroding our advantage. The very researchers and graduate students who fuel our labs and anchor innovation are being lost to the reputational damage caused by recent immigration policy changes. A fast, reliable, and strategic pathway for top talent is essential if Canada is to remain competitive. The federal government must remove the student permit cap on graduate students.
Canada’s ability to withstand short-term turbulence will matter, but our future will ultimately be decided by whether we build our capabilities for long-term resilience. That means drawing on the two resources we already possess in abundance: world-class research and deep pools of expertise. Talent and discovery are not abstract assets: I see them every day in our leading research universities and labs. They are the foundations of sovereign capabilities and productive capacity.
