Canada isn’t ready for Carney’s ‘new world’

Now delivering on this vision is easier said than done. An alliance of middle powers is, at this point, more of an academic exercise akin to herding cats. There’s evidence, in fact, that some prospective partners like the United Kingdom have distanced themselves (at least rhetorically) from Carney’s proposition. But alliance building aside, the hurdles are steep. Even if billions of dollars are invested in ports and pipelines to move more energy and resource products east-west, the economic boost from the construction activity is short-term. The long-term impact will (perhaps counterintuitively) be a less diversified economy, even more focused on the hewing of wood and drawing of water, akin to the staples economy we thought we had left behind. While with 40 million people, Canada has a much larger internal market than in days of yore and could produce more of its own wares, unfortunately, numerous provincial trade barriers still stand in the way of fully exploiting economies of scale and efficiencies in production. And as for reducing our economic dependence on the United States, it should be kept in mind that exports of goods and services currently account for about 30 percent of Canada’s GDP.  Moreover, Canada exports over three-quarters of its goods to the United States and also imports almost half of its goods from the United States. With total Canadian exports of goods in 2024 at $777.6 billion and total imports of goods at $784.8 billion, we are looking at nearly $600 billion of our exports tied to the American economy, as well as nearly $400 billions of our imports. While Canadian exports to non-U.S. economies apparently grew 14 percent in the first half of 2025, that amounts to only about $25 billion dollars. There is a lot more export growth to do, not to mention finding a lot more countries to replace our U.S. imports with, especially given current levels of trade with both China and Europe. In other words, there’s still no complete alternative to restructuring our trade relationship with the U.S. and Mexico. Prime Minister Carney may indeed be hatching a coherent Canadian global strategy by mobilizing a new trade and security network of middle powers designed to exert countervailing power against the much larger Chinese, American, and Russian great powers. It may even work. Canada’s role as a middleman to such a network of middle powers via its position as a Zone of Transit could cement Canada’s role as a leading 21st-century economy and respected power broker. Yet one suspects that the hegemons—the U.S. in particular—will not take kindly to upstart Canadians acting more independently, especially with respect to the Arctic, given their newly reconstituted hemispheric policy. They are even less likely to be pleased with a more independent defense procurement policy.  While the Americans are unlikely to deal with us by seizing our prime minister a la Maduro or sabotaging the country’s transport system by taking the Nipigon Bridge, there will inevitably be a lot of pushback. President Trump at Davos pointedly singled out Carney with a remark that Canada only lives because of the U.S.  That’s only the thin edge of the wedge in this drama, and recent days have seen the president once again become increasingly vociferous with respect to Canada-U.S. economic issues. We’re in interesting and challenging times, and we really don’t know where we’ll end up. For now, all we can say is that the prime minister continues to be very busy. We wish him every success, for his sake and for ours.