Canada’s Plan B: Hedging Beyond the United States

In September, Canadian Prime Minister Mark Carney spoke of building a “unique alliance” between Canada and the European Union.

The substance is less dramatic than the headlines, but more revealing. Ottawa wants deeper cooperation in energy, critical minerals, defence, artificial intelligence, finance, research and digital trade. Canada has already become the first non-European country allowed to participate in procurement under the EU’s SAFE defence instrument.

For Brussels, the symbolism is irresistible. A G7 economy, NATO member, Arctic power and major resource producer is looking across the Atlantic for a relationship so unusual that Europe may eventually have to invent new terminology for it. The temptation will be to call this evidence of Europe’s growing geopolitical attraction.

Ottawa’s behaviour points to something rather more pragmatic.

Europe is becoming part of Canada’s diversification strategy.

Canada Discovers the Value of Options

For most of modern Canadian history, geography settled much of the country’s strategic orientation. The United States was the enormous economy next door, Canada’s principal security partner and the centre of the continental system in which Canadian prosperity developed. Supply chains, investment, infrastructure and defence relationships accumulated around that reality over decades.

None of this has disappeared. What has changed is the assumption that dependence on a friendly neighbour remains comfortable simply because the neighbour is friendly.

Trade tensions with Washington have made the vulnerability more visible. When access to your overwhelmingly important neighbouring market can also become political leverage, diversification stops looking like diplomatic decoration and starts looking like insurance.

Carney’s response therefore extends well beyond Europe. His government has explicitly spoken of moving Canada “from reliance to resilience”, doubling non-US exports and expanding commercial relationships elsewhere. Ottawa has also rebuilt its relationship with Beijing. Following Carney’s January visit to China, the two governments announced a new strategic partnership covering trade, energy, finance and other areas, with Canada seeking significantly greater exports to the Chinese market.

Seen alongside Beijing, the European opening looks........

© New Eastern Outlook