Mark Carney said Canada will pursue a \u201cunique security and economic alliance\u201d with Europe as he positions his country as a base to build in the \u201cnew global economic order\u201d.<\/p>\n
Speaking to investors, company executives and government ministers at the inaugural Canada<\/a> Investment Summit on Tuesday, the prime minister pitched Canada as a \u201csafe harbour\u201d and lucrative home for foreign capital as his government looks to reduce its reliance on trade with the United States.<\/p>\n Over the last 18 months, the relationship with the US has fractured, leaving Canada searching for ways to avert economic devastation.<\/p>\n \u201cThe world is becoming more divided and dangerous. Sovereignty and openness are now in tension. Economic integration is being weaponised. Tariffs are used as leverage,\u201d Carney said \u2013 a nod to the Donald Trump\u2019s penchant for trade levies.<\/p>\n \u201cCanada recognised the rupture earlier than most. Our response reflects the two lessons we have taken from it: First, we must take care of ourselves, and second, we must take care of each other. Taking care of ourselves means building our strength at home and diversifying our partnerships abroad.\u201d<\/p>\n While Carney has referred to the trade spat as a \u201cwar\u201d, there was a duelling sense of optimism at the summit among senior Canadian officials that the country\u2019s more global perspective could usher in hundreds of billions in fresh investment into the country.<\/p>\n That shift has been exemplified in recent weeks by Carney\u2019s effort to strengthen Canada\u2019s economic and political ties to the EU. Noting in his remarks at the summit that Canada is the only non-European member of Europe\u2019s defence procurement initiative, the prime minister said his government will pursue a \u201cunique\u201d relationship with the bloc. He mused about the range of possibilities, including the prospect of visa-free travel and work between the two that has been raised in recent days, but said Canada and the EU were in early stage of talks.<\/p>\n Carney will be the guest of honour at the European parliament\u2019s plenary meeting in Strasbourg this week. He will attend European Commission president Ursula von der Leyen\u2019s annual state of the union speech on Wednesday, where she is expected to sketch out new areas for EU-Canada cooperation. On Thursday, Carney will address MEPs in von der Leyen\u2019s presence. The commission president hastily changed her plans to stay in Strasbourg, after being criticised over her initial \u201cunacceptable\u201d decision to skip Carney\u2019s speech and return to Brussels.<\/p>\n European officials are seeking to bring Canada as close as possible to the EU short of membership. But it will not be called associate membership, as the EU seeks to maintain a clear distinction between members and nonmembers. The long experience of Brexit negotiations cemented the EU\u2019s preference not to split the four freedoms of its single market \u2013 free movement of people, services, goods and capital \u2013 so any deepening of the Canada relationship will be built around this red line. More immediately, the EU hopes to improve ties on raw materials and energy.<\/p>\n Javier Moreno S\u00e1nchez, a Spanish socialist MEP, who leads the European parliament\u2019s Canada delegation, said he wanted to hear \u201cconcrete steps\u201d from von der Leyen on how to improve the EU-Canada relationship, calling for greater mobility for professionals, more student exchanges, joint work on defence and artificial intelligence.<\/p>\n \u201cCanadians are the most European people outside Europe and that is the key point for the development of our relationship,\u201d he said. \u201cDue to the difficult geopolitical geoeconomic situation in the world and the difficult relationship we have, both Canada and the European Union<\/a>, with our traditional partner, the United States, I think it is the moment to have a closer relationship with Canada.\u201d<\/p>\n The EU and Canada already have a wide-ranging relationship, including a free-trade agreement and separate deals on digital cooperation, raw materials, research and a shared green alliance. Earlier this year, Canada became the first non-European country to join the EU\u2019s \u20ac150bn defence loans scheme, meaning greater opportunities for Canadian defence firms to supply Europe.<\/p>\n But irritants persist. Ten EU member states, including France, Italy and Poland, have not ratified the landmark EU-Canada Comprehensive Economic and Trade Agreement (Ceta) nearly a decade after it was signed, meaning parts of the deal are yet to enter into force.<\/p>\n French lawmaker Val\u00e9rie Hayer, Emmanuel Macron\u2019s ally in the European parliament, acknowledged the problem. \u201cIn the French parliament this agreement has yet to be ratified, notwithstanding the [trade] figures which are extremely good. That is why I call on political leaders [in France] to do their bit to act responsibly as elsewhere to make sure that we [the EU] can count for more in world affairs.\u201d<\/p>\n Hayer\u2019s centrist Renew group, only the fifth-largest in the European parliament, is calling on EU member states and the commission to speed up Ceta ratification and launch an awareness-raising drive so European and Canadian companies have better knowledge of the trade opportunities. But ahead of a year of big elections \u2013 in France, Italy and Poland \u2013 progress on ratifying the 10-year-old agreement looks uncertain.<\/p>\n EU-Canada\u2019s trade in goods and services hit \u20ac130bn in 2025, an 80% increase since 2016 when Ceta was signed<\/a>. But this pales in comparison to trade with the US, which is worth nearly US$880bn.<\/p>\n Despite a deliberate push to increase global trade, Carney acknowledged the geographic realities of Canada\u2019s proximity to its southern neighbour, and the reality, which most economists concede, that the US will remain Canada\u2019s largest trading partner.<\/p>\n \u201cWe will always be neighbours, and Canada will continue to be the US\u2019s most important partner in many key areas,\u201d he said. These arrangements work when we engage as true partners that respect each other\u2019s traditions and sovereignty.\u201d<\/p>\n In recent weeks, Trump has both threatened Canada\u2019s economy and mused about a North America under the umbrella of an expanded US.<\/p>\n Event host Erik Schatzker told attendees that Canada was neither a \u201cbystander nor a victim\u201d in the dramatic geopolitical shifts that have defined the Trump era. \u201cCanada is a protagonist. Canada has agency. Canada is defining its own future.\u201d<\/p>\n Carney said foreign investment has dramatically increased and the federal government was on track to balance the operating budget one year ahead of schedule, an announcement that received applause from the crowd. He announced a corporate tax \u201cmega-deduction\u201d that would help compete with similar incentives in the US allowing companies to immediately deduct 100% of the cost of new investment across more assets than previously permitted.<\/p>\n Carney also confirmed Canada would open four of its major airports to foreign investment in order to \u201cunlock their true value\u201d. The prime minister also said his government would \u201capply [the] lessons\u201d of instances in which allowing partial private investment had failed.<\/p>\n But that theme \u2013 soliciting hundreds of billions in foreign investment while also reshoring domestic capability \u2013 has frustrated some.<\/p>\n