Canadian Prime Minister Mark Carney has declared that Canada's once-prized economic relationship with the United States has become a vulnerability, calling for a fundamental rethinking of how the country positions itself in a rapidly shifting global order. In a 10-minute video address released on Sunday, Carney said his government would pursue new investments, fresh trade agreements with other nations, and greater self-reliance to correct what he described as dangerous over-dependence on a single partner.
"The world is more dangerous and divided," Carney said. "The U.S. has fundamentally changed its approach to trade, raising its tariffs to levels last seen during the Great Depression. Many of our former strengths, based on our close ties to America, have become weaknesses. Weaknesses that we must correct." He pointed specifically to the impact on Canadian workers in the auto and steel industries, and warned that investment was being held back by a broader climate of uncertainty created by US trade policy under President Donald Trump.
Carney, who built his career as a central banker — serving as governor of both the Bank of Canada and the Bank of England — has been a consistent voice on the risks posed by great-power economic coercion. His January address to the World Economic Forum in Davos, Switzerland, where he condemned such coercion, drew sharp pushback from Trump, who responded: "Canada lives because of the United States. Remember that, Mark." Sunday's remarks carry added political weight coming shortly after Carney's party secured a majority government following special election wins, even as opposition Conservatives press him to deliver on a promised US trade deal. A formal review of the existing North American Free Trade Agreement between Canada, the US, and Mexico is scheduled for July.
Carney outlined a broad domestic agenda alongside his call for diversification: doubling Canada's clean energy capacity, reducing internal trade barriers between provinces, increasing defence spending, cutting taxes, and improving housing affordability. He also acknowledged the political sensitivity of openly confronting the relationship with Washington, pledging transparency with Canadians. "Hope isn't a plan and nostalgia is not a strategy," he said, rejecting the idea that waiting for US policy to revert to its previous course was viable. Many Canadians have also been unsettled by Trump's repeated suggestions that Canada should become the 51st US state.
Why this matters: Canada sends roughly three-quarters of its exports to the United States, making it among the most trade-exposed developed economies relative to a single partner. Carney's address signals a significant shift in Ottawa's strategic posture — away from managing the bilateral relationship and toward actively hedging against it. Whether that pivot translates into durable trade and investment alternatives will depend on negotiations in the months ahead, with the July NAFTA review likely to serve as an early test of how far the two neighbours have drifted apart.