By Anil Wasif

January 8, 2025

The long arc of Canadian history is a ledger of negotiation between geography and ambition. This history provides both the muscle memory from a legacy of trade that predates the Hudson’s Bay Company in 1670, and the experience required for survival on a newly volatile continent.

But, as elaborated by Prime Minister Mark Carney in The Economist recently, nostalgia is not a strategy.

Closing the first week of 2026, that national DNA is being tested by a new clarity following the U.S. seizure of Venezuelan President Nicolás Maduro on January 3rd. This is the geopolitical rupture the Prime Minister warned of in his year-end interviews, transforming the North American energy map and adding yet another — possibly fatal — blow to the post-Cold War order of multilateral rules.

Prime Minister Carney’s vision for a leaner and bolder Canada recognizes that our recent $153-million monthly trade surplus and $8.6-billion bilateral surplus with the United States are ripples in a tsunami. To navigate this, the C-Suite must embrace an industrial strategy that treats geopolitics as state capacity.

Statements this week from G7 foreign ministers confirm that we have indeed entered the era of variable geometry, where overlapping coalitions are built around shared interests. As the Prime Minister argued in The Economist, multilateralism is being followed by plurilateralism, a mosaic of smaller agreements where successful coalitions attract joiners.

Enter the 2026 CUSMA review that could redefine the cost of doing business across the 49th parallel and beyond. Mandated by Article 34.7 of CUSMA, this a high-stakes re-baselining of a trilateral deal. This formal joint review will begin on July 1, the sixth anniversary of entry into force.

As former chief NAFTA negotiator and Policy contributor John Weekes and trade scholar Barry Appleton have observed, this sunset clause refers to a mandatory term where failure to reach renewal triggers an annual re-confirmation of trade access from July onwards.

Plurilaterally, market access becomes a subscription, like a Costco membership, through targeted investment and security commitments. Success for Canadian firms will depend less on the strength of our values than the value of our strength, as outlined by the Prime Minister at the Council of Foreign Relations in September.

The catalyst is a security-for-interest swap. So far, this has involved buying our way back to the high table through a revised 5% defence spending commitment by 2035, a call for a voluntary 400,000 civilian defence force, a new consulate in Nuuk, Greenland and progress updates on the Golden Dome from the Royal Canadian Air Force.

Such measures aim to ensure Canadian interests in Arctic sovereignty and critical minerals are defended in this new era, while breadcrumbing the US to tolerate our dairy markets and digital sovereignty.

For Canadian boardrooms, here’s how this translates to trade-offs across key battlefront sectors:

On energy, if Washington redirects 800,000 barrels of Venezuelan crude per day to Houston, Canadian heavy crude prices fluctuate. This makes expanding West Coast pipeline capacity and deepening energy partnerships with China a sovereign necessity for price stabilization.

The mid-January CUSMA hearings are the dress rehearsal for a world where Canada no longer asks for permission to prosper, and where the United States is evolving daily into a hemispheric actor whose trajectory we may wish to decouple from.

Here, the C-Suite can hedge on the promise of being an energy superpower with 85% clean energy and the capacity to add to the grid in 10-gigawatt chunks

For the auto sector, we remain ambitious on the North American front. With sectoral “Liberation Day” tariff talks suspended since October, steel and aluminum negotiations have been moved into the CUSMA review.

This shift necessitates a hardened stance on rules of origin for industrial automotive components through the alignment of tariff and investment rules to neutralize U.S. concerns over non-market transshipment. I.e., building a China firewall.

On R&D, similar to bio-medicine and advanced materials, 75 percent of patents from Canadian AI institutes flow to foreign firms. The rupture highlights a talent drain that Carney aims to reverse through mission-oriented funding and recruitment, symbolized by Timothy Snyder’s appointment at the Munk School and Melanie Woodin’s first three hires as President of UofT.

For CEOs, this is a call to align corporate R&D to end our status as a “tenant in another empire’s code” by scaling Canadian IP at home. For government, the mission is to make that easy.

Conversely, boards must brace for an assault on agriculture and rural economies. United States Trade Representative Jamieson Greer recently identified provincial bans on U.S. alcohol, specifically Kentucky bourbon, and dairy access as primary friction points.

The strategy is barter, potentially trading market access in niche dairy lines for the preservation of broader poultry and egg frameworks. This approach is mirrored in the digital economy, where Greer has targeted the Online Streaming and Online News Acts.

Federally, the Free Trade and Labour Mobility in Canada Act came into force on January 1, 2026, to remove internal trade barriers that impose a hidden 7% tariff. By harmonizing standards and removing provincial barriers in energy and services, the government is creating an integrated market of 41 million people. Carney has complemented this by cutting taxes on income and capital gains to build strength at home, presenting a unified “Fortress Canada” to Washington.

Globally, the pursuit of plurilateralism looks like aligning with the United States on issues like fentanyl (where levels are down 90 percent), while building trade bridges between the EU and the Indo-Pacific. Diversifying into Indonesia and ASEAN reduces our 20% GDP exposure to U.S. volatility, utilizing concentric circles of integration with coalitions sharing Canada’s standards on labor, data, and the environment.

The mid-January CUSMA hearings and Canada-US Trade Minister Dominic LeBlanc’s mission to Washington are the dress rehearsal for a world where Canada no longer asks for permission to prosper, and where the United States is evolving daily into a hemispheric actor whose trajectory we may wish to decouple from.

For Canadian decision makers — including political leaders, policy makers, workers and CEOs — the risk is not the end of CUSMA, but a failure to realize that this could be the end of CUSMA; not simply for reasons of U.S. protectionism, but because of our own strategic pragmatism.

Policy Columnist Anil Wasif is a public servant in the Ontario government. He serves on the University of Toronto’s Governing Council and the Advisory Board of McGill’s Max Bell School. Internationally, he serves on the OECD’s Infrastructure Delivery Committee. He co-owns and manages the Canada-born global non-profit BacharLorai. The views expressed are his own.