{"id":452791,"date":"2025-09-26T12:27:13","date_gmt":"2025-09-26T12:27:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/452791\/"},"modified":"2025-09-26T12:27:13","modified_gmt":"2025-09-26T12:27:13","slug":"geography-and-destiny-can-canada-truly-spurn-the-u-s-and-be-more-european","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/452791\/","title":{"rendered":"Geography and destiny: Can Canada truly spurn the U.S. and be more European?"},"content":{"rendered":"

Two days before Prime Minister Mark Carney\u2019s<\/a> recent visit to Berlin, Canada put on a little show at the German Foreign Ministry. <\/p>\n

This country, the Group of Seven president this year, was one of three that did so at the Ausw\u00e4rtiges Amt\u2019s open house. Walking up the red carpet and through the marbled halls, one could see little Maple Leaf flags sticking out of backpacks and waved by children. Bully, the polar bear mascot for the Eisb\u00e4ren Berlin hockey team, also made an appearance. <\/p>\n

But there were few other offerings. Canada gave out a singular maple syrup candy for completing a bingo quiz with questions such as \u201cWhat is the name of the Prime Minister of Canada?\u201d (One could keep the faux-wooden pen, though.)<\/p>\n

Denmark, which holds the rotating <\/b>European Union<\/a> presidency, had a section at least three times larger. The Danes offered spin-the-wheel prizes and liquor samples, sold Danish hot dogs and went big on a Lego play section and ads for the Berlin Legoland. Did you know Lego comes from Denmark? The Danes think you forgot.<\/p>\n

South Africa, the G20 president this year, ostensibly shared the hall with Canada but took up twice the space. The country sold wine, hawked safaris, had a multipanel exhibit on Nelson Mandela and offered oranges. And how to stage a spectacle when you don\u2019t even have an opera singer? When the South African soprano drew a crowd under the cobalt blue ceiling, some of whom sipped their South African wine, one could tell the last thing on their minds was Canada.<\/p>\n

A relatively muted Canada exhibit is on display at the the Ausw\u00e4rtiges Amt\u2019s open house in Berlin.<\/p>\n

Ethan Lou\/The Globe and Mail<\/p>\n

Will the world change because Canada looked a little small and cheap on a random weekend in Germany<\/a>? Probably not. But small issues reflect the big. That scene symbolizes something: the Canada of old, the one that, over decades, shrank from international engagement and degraded its capacity for it. The one that took for granted the protection and market access to the south, growing fat and comfortable suckling on the American teat.<\/p>\n

Two days later came the Canada of the new.<\/p>\n

Mr. Carney arrived in Berlin to military honours, quipped \u201csign me up\u201d as he toured an U-Boot at the shipyard and was later praised for his \u201cenergy.\u201d With Mr. Carney was his battle buddy from Goldman Sachs and the Bank of Canada, Natural Resources Minister Tim Hodgson, fresh from cataract surgery and fitting right in with his sunglasses in the techno music capital. Mr. Hodgson brought a trade delegation of business bigwigs and signed a critical minerals pact<\/a>.<\/p>\n

We all know why Mr. Carney goes to Berlin. The United States is our lifeblood, the destination of more than 70 per cent of exports from this export-dependent country, and it\u2019s imposed crippling tariffs<\/a>. Calls for Canada to join the European Union have popped up again: from The Economist, from politicians in Germany and academics both sides of the Atlantic, and from 46 per cent of Canadians in an Abacus Data survey. The old continent is the hot new thing.<\/p>\n

It was Mr. Carney\u2019s fourth trip to Europe as Prime Minister. On his first foreign visit<\/a>, Mr. Carney had spurned the U.S. and made for Britain and France. He said then he was \u201ccreating new trade corridors with reliable partners\u201d and called Canada \u201cthe most European of non-European countries.\u201d Germany is Europe\u2019s biggest economy, and Canada does about $30-billion in merchandise trade with the country annually. Now, we need more.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Mr. Merz, left, receives Mr. Carney with military honours in Berlin on Aug. 26. Canada does about $30-billion in annual merchandise trade with the Germany, Europe\u2019s biggest economy.Soeren Stache\/The Associated Press<\/p>\n

Look deeper, though, and you\u2019d see the critical minerals agreement signed in Berlin mentions no specific projects or timeline, but does state it is \u201cnot legally binding and does not create any financial commitment.\u201d You\u2019d notice the scant attention German media paid to Mr. Carney\u2019s visit. You\u2019d notice Canada had no ambassador in Germany for the bulk of the past three years. You\u2019d notice there is no Canadian chamber of commerce based in Germany.<\/p>\n

This vision of a new Canada has not quite washed away the old, and can we really expect anything different?<\/p>\n

Mr. Carney said, \u201cWe can control our destiny.\u201d But there\u2019s also the saying that geography is destiny. Some say Napoleon first uttered it, though you\u2019re more likely to note it as the title of a book that says the dominant force in Britain\u2019s history has simply been its blessed plot and its earth. So, too, it is for us. And geography we cannot control.<\/p>\n

For want of the riches of the land, this country was settled. Through tension with its neighbour, this country was defined. And from selling its riches south, this country was subsumed. It is the land that shapes us, the land that feeds us, and now the land that binds us. There is no question about the worthiness of the cause. But let\u2019s not hold any illusions about the difficulty of diversifying trade to Europe, not just the toil and the cost but also the time \u2013 it might well outlast the will we have now summoned for it. <\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Former foreign affairs minister Chrystia Freeland delivers a speech in the House of Commons in June, 2017, highlighting Canada’s commitment to its transatlantic alliance with the EU.Sean Kilpatrick\/The Canadian Press<\/p>\n

Back in U.S. President Donald Trump\u2019s<\/a> first term, Canada\u2019s then-foreign-affairs-minister, Chrystia Freeland, in the spring of her career, said we must \u201cset our own clear and sovereign course.\u201d In a noted speech, she mentioned trade 12 times. \u201cRising trade barriers hurt,\u201d Ms. Freeland said. \u201cOur steadfast commitment to the transatlantic alliance \u2013 our bond is manifest in CETA, our historic trade agreement with the European Union.\u201d This country would \u201cintensify our efforts to diversify.\u201d<\/p>\n

Later in 2017, the Comprehensive Economic and Trade Agreement provisionally came into force. Since then, the value of Canadian goods and services exported to the EU and Britain, which retained a version of the pact when it left the union in 2020, has risen to almost $100-billion. That is an increase of more than 50 per cent.<\/p>\n

Go to a bar in Berlin, one might pay with a terminal by Montreal\u2019s Lightspeed Commerce Inc. Stream a podcast, and one might hear an ad with the entrepreneur \u201cTheresa\u201d saying chirpily that Shopify never gives any probleme and is super einfach. Go to the big industry meets \u2013 the Frankfurt Bookfair, Hannover Masse and VivaTech in France \u2013 and you\u2019ll see Canada as the guest of honour, shining like a beacon.<\/p>\n

But consider that Canada\u2019s exports as a whole grew nearly 50 per cent since 2017. While trade with Europe grew faster than with other countries, it hasn\u2019t moved the needle. The EU and Britain\u2019s share of Canada\u2019s total exports is now a little under 10 per cent, gaining less than one percentage point since Ms. Freeland charted her clear and sovereign course.<\/p>\n<\/p>\n

In 1972, amid the Nixon administration\u2019s shock of \u2013 wait for it \u2013 tariffs, yet another Canadian foreign affairs minister had another ambitious idea. Mitchell Sharp pushed the \u201cThird Option,\u201d and Ottawa signed a framework trade agreement with the then-European Economic Community. We all know how that ended. The Canadian Encyclopedia labelled the Third Option \u201ceasier to applaud than to implement.\u201d<\/p>\n

Canada\u2019s trade with the U.S. kept rising. Goods exports went from 70 per cent of the total to nearly 80 per cent by the mid-1980s. Then came the Canada-U.S. free-trade Agreement. John Turner, <\/b>Liberal leader at the time, warned that it made Canada a \u201ccolony,\u201d but he lost the 1988 election. And a curious thing happened. Not only did Canada continue trading heavily with the U.S., trade as a portion of the Canadian economy also rose \u2013 to a peak of more than 80 per cent in 2000, up from 50 per cent in 1989.<\/p>\n<\/p>\n

And deep in the embrace of Big Brother, we lost ourselves. Observers note Ottawa\u2019s diminishing influence abroad, and the Foreign Ministry\u2019s diminishing influence within Ottawa. Canada was repeatedly snubbed internationally, including being left out of AUKUS, the Australia-Britain-United States defence pact. Diplomatic missteps compounded, such as then-prime-minister Justin Trudeau\u2019s 2018 visit to India. The Canadian Foreign Service Alumni Forum writes, \u201cMuch of Canada\u2019s diplomatic presence is a Potemkin village.\u201d<\/p>\n

In some way, we can go back even farther, to the U.S. Smoot-Hawley tariffs of early 20th century, or to the 19th century, when Canada faced hostile trade action from the British Empire and the U.S. In South Park, Leopold Stotch asks, \u201cHow come every time I think of something clever, The Simpsons already did it?\u201d This country has been in this position before. The solution was not always Europe, but the final destination was always south. <\/b><\/p>\n

Canada’s Minister of Energy and Natural Resources Timothy Hodgson addresses the Canadian and German trade delegations at the Canadian embassy in Berlin, where he and German Economy and Energy Minister Katherina Reiche signed a Joint Declaration of Intent on critical minerals in August.<\/p>\n

Ethan Lou\/The Globe and Mail; Larissa RAUSCH\/AFP<\/p>\n

The morning after Mr. Carney left Germany, Natural Resources Minister Hodgson addressed Canadian and German trade delegations at the embassy in Berlin. He quoted the late West German chancellor Konrad Adenauer and tried his best to pronounce one of those German portmanteau combo-words (Energiewende). <\/p>\n

Mr. Hodgson stressed he was \u201cnot speaking in the abstract,\u201d and the Canadian delegation list reflects that seriousness. Companies that sent chief executive officers or other honchos include Ovintiv Inc., the natural gas producer that was once Canada\u2019s largest; LNG Canada, the first export terminal for liquefied natural gas, and Woodfibre LNG and Ksi Lisims LNG, yet-to-come projects; Canada\u2019s top three pipeline firms Enbridge Inc., TC Energy Corp. and Pembina Pipeline Corp.; and major miners Teck Resources Ltd. and Vale Base Metals.<\/p>\n

\u201cUnlike the previous Canadian government, which closed the door to LNG exports, Prime Minister Carney\u2019s government has opened them,\u201d Mr. Hodgson said. A Bloomberg hit went out when he was still talking, saying he \u201crebukes Trudeau.\u201d Parse Mr. Hodgson\u2019s words, though, and you\u2019d see the hedging: \u201cif the demand is here and the infrastructure is built.\u201d <\/p>\n

Later, Mr. Hodgson repeated that caveat. Yes, Ottawa has opened a Major Projects Office to \u201cbuild things we never imagined, at a pace we never thought possible.\u201d Even so, Mr. Hodgson told Politico: To ship LNG to Europe from the much-hyped Port of Churchill, \u201cyou\u2019re probably talking about five to seven years.\u201d <\/p>\n

An internal file obtained by The Globe and Mail\u2019s Bill Curry projects necessary upgrades at nearly $2-billion. The port lost money for most of its history. Experts are not sold.<\/p>\n

This might be a good time to talk about a related commodity: oil<\/a>, the embodiment of this country\u2019s U.S. economic dependence. Almost all of Canada\u2019s oil goes south, and more than a decade ago, Ottawa threw its weight behind efforts to change that. Some of the very companies represented at Mr. Hodgson\u2019s trade delegation suffered heavy losses.<\/p>\n<\/p>\n

Opposition from environmental groups and some First Nations, and the political mood, resulted in challenges, legal or otherwise. Two pipelines never made it. Enbridge was out nearly $400-million. TC Energy wasted $1-billion and later spun off its entire oil business. <\/p>\n

The U.S. company Kinder Morgan Inc. threatened to walked away from its Trans Mountain expansion project after spending $1-billion. A desperate Ottawa bought the pipeline. Last year first oil flowed, 12 years after the expansion was proposed, six years behind schedule and at a cost of $34-billion, an astronomical sum almost seven times the original estimate \u2013 the entire Telus Corp., for example, has a stock market value of $35-billion.<\/p>\n

There\u2019s a school of thought that it was still worth it. The Bank of Canada has estimated that, in the second quarter of 2024 alone, the pipeline added 0.25 per cent to Canada\u2019s economy (roughly $7-billion). But in terms of diversifying from the U.S., how much difference did the expansion make? Ninety-two per cent of Canadian oil now goes to the U.S., down from 97 per cent.<\/p>\n

To varying degrees, oil\u2019s is the same problem that afflicts nearly every industry that matters. And we have not even begun to talk about the heavy grade of Canada\u2019s oil sands crude, to which some American refineries cater. It doesn\u2019t matter whether the chicken or egg came first. Whether it\u2019s infrastructure, regulatory compliance, supply lines or product specifications, we\u2019ve shaped our economy over decades to adapt to one dominant customer. The cost and risk to reorient that is enormous.<\/p>\n

That was the problem with Ottawa\u2019s Third Option in the 1970s, according to academics from Laval University. \u201cThere was very little follow-up on the part of the Canadian private sector,\u201d Gordon Mace and G\u00e9rard Hervouet write. The private sector \u201cdid not feel, at that time, that there were enough incentives to balance the costs of expanding economic relations outside the North American markets.\u201d<\/p>\n

Every time there is a European trade fair, we hear of small and medium-sized Canadian firms finding success. But the plural of anecdote is not data. Last year, the top 1 per cent of Canada\u2019s exporters produced nearly 80 per cent of the value of exports. And who is this 1 per cent? Look at the companies on the Toronto Stock Exchange, legacy industries that spent decades burrowing into the U.S.<\/p>\n

Mr. Carney watches as Canadian wheat is unloaded from a train car during a tour of the Canadian Pacific Kansas City train yard in Mexico City earlier this month. Born out of the merger between Canadian Pacific and Kansas City Southern, in 2023 CPKC became the only rail network to seamlessly connect Canada, the U.S. and Mexico.<\/p>\n

Adrian Wyld\/The Canadian Press<\/p>\n

Canada\u2019s banks, in their saturated domestic market, see American expansion as crucial. The auto industry is so intertwined with the American one that it is the American one. Canadian Pacific Railway Co. has become Canadian Pacific Kansas City Ltd., buying an American rail network and linking the continent in a single route. It bet everything on America.<\/p>\n

What can Canada\u2019s steel industry, which sends south more than 90 per cent of its wares, do in Europe? \u201cThere just aren\u2019t those opportunities right now,\u201d Michael Garcia, CEO of Algoma Steel Group Inc., said on a recent earnings call. \u201cI don\u2019t think that there\u2019ll be a lot of those opportunities going forward, to be frank.\u201d <\/p>\n

The softwood lumber industry, which sends 90 per cent of its wares south despite decades of trade friction, isn\u2019t keen on Europe either, saying, \u201cWe\u2019re never going to diversify our way out of the U.S.\u201d Among other issues, Canadian wood is cut to imperial measurements; changing that is not easy.<\/p>\n

Two companies represented at Mr. Hodgson\u2019s trip, TC Energy and Ovintiv, once had the country in their names: TransCanada and Encana Corp. Then they dropped the name and pivoted south. TC Energy and its fellows might be keen on a Port of Churchill pipeline, but its CEO said this year: \u201cWe see the highest risk-adjusted returns being in the United States. The vast majority of our discretionary capital is going, and we expect that it will continue to go, into the United States.\u201d Ovintiv has moved its headquarters to Denver.<\/p>\n<\/p>\n

For companies in the S&P\/TSX Composite Index, mentions of Europe on conference calls are no more this year than last year. But look at the mentions of the Canada-United States-Mexico Agreement, or USMCA, as the Americans call it: Almost 60 instances until the end of August, up from the 10 for the entire 2024. Listen to Business Council of Canada head Goldy Hyder, the voice of big corporations: \u201cThe USMCA continues to be our most important trade and investment agreement. That\u2019s why it must be Prime Minister Mark Carney\u2019s top trade priority.\u201d <\/p>\n

In July, even amid this diversification talk, Canada\u2019s U.S. exports increased for the second month in a row. While tourism to the U.S. has been falling, business travel is unchanged.<\/p>\n

Open this photo in gallery:<\/a><\/p>\n

Mr. Carney, left, tours Thyssenkrupp Marine Systems, a submarine building facility in Kiel, Germany, with Industry Minister M\u00e9lanie Joly and Germany’s Federal Minister of Defence Boris Pistorius in August.Christinne Muschi\/The Canadian Press<\/p>\n

Ottawa has so far homed in on some of the right sectors where there is European demand. There\u2019s natural resources. And there\u2019s defence, for which Ottawa has signed a pact to let Canadian companies to supply the EU. But this country has 15 free-trade deals with more than 50 countries, representing nearly 70 per cent of the world economy, and it still sends most exports to one customer. Simply signing papers and playing matchmaker is not enough.<\/p>\n

To make actual progress, Ottawa must provide additional support for businesses. This, it has done to a certain degree. Ottawa has pledged billions to subsidize Canadian-German hydrogen trade and to help tariff-affected companies reach new markets. Many items considered by the Major Projects Office, which may involve financial support, are geared toward diversifying exports.<\/p>\n

But there is not necessarily wisdom in having the government pick winners. The hydrogen trade, for example, yet to see results and behind schedule, cannot even be called a winner. Such government support will always be costly. <\/p>\n

And every dollar Ottawa spends on something is not just a dollar not spent on something else; in the current fiscal situation, it is also a dollar taken from somewhere else that must be repaid. Even the business lobby has been critical, saying, \u201cThe spending of today stays with us in the deficits of tomorrow.\u201d The spending of today can also stay with us in the cuts of today. Mr. Carney is already warning of an austerity budget in November.<\/p>\n

This is the quandary. In trying to diversify to Europe, we will be fighting geography. We will see hardship and difficulty, and for a long time, we will not see results. Do we have the imagination and perseverance to keep convincing ourselves that it remains righteous?<\/p>\n

History tells us we do not. History tells us we always choose the ease and certainty of losing small over the difficulty and risk of trying to win big. Products that comply with CUSMA are exempt from Mr. Trump\u2019s tariffs. Businesses feel no fire underneath to fuel boldness. Some face separate sectoral tariffs, but there\u2019s still hope in the air that, like the Japanese and the Europeans, we will strike some unequal treaty that will not entirely kill margins, and companies will take that hit and thank Mr. Trump for it. And once we reach that new normal, the big bucks we spend now to diversify will not be so spent again.<\/p>\n

Ottawa must take advantage of the current political mood. But it must also be judicious about the projects it backs and be mindful that Europe is one market in a big world, and that export diversification is itself one policy goal among many. At the same time, Ottawa must prepare for the waning of the current political mood and look toward lighter diversification efforts.<\/p>\n<\/p>\n

For smaller firms, Ottawa can build a system to distill the voluminous frameworks of trade agreements into hyperspecific product information. The U.S. has this, and it makes a difference, writes Carlo Dade, director of the University of Calgary\u2019s School of Public Policy, in a research note. Ottawa can also help streamline the agencies offering export help. \u201cA food processor in Alberta that owns neither a tractor nor a chainsaw would be surprised to discover that help is in the Alberta Ministry of Agriculture and Forestry,\u201d Mr. Dade said.<\/p>\n

Such lighter diversification efforts could be as simple as an attitude adjustment. German media have noted that honourees at the Hannover Masse usually send major leaders, but Canada sent only St\u00e9phane Dion, EU envoy and ambassador to France and Monaco. There\u2019s value in appearances, including offerings at a foreign ministry\u2019s open house. Canada should also embrace tighter the continental bodies in which we already participate, such as the Council of Europe.<\/p>\n

Ottawa can also work on policy measures that have trade diversification as an indirect outcome. Such initiatives, which have additional impetuses and interest groups behind them, can have broader appeal.<\/p>\n

One example is to build up sectors not so dependent on geography: those of the future, such as artificial intelligence<\/a>, quantum computing and cryptocurrency. Cohere, an Ottawa AI darling, is opening a Paris office. We need more such moves. Ottawa might also target sectors out of favour in the U.S., such as clean technology. Some of this perverts the free market. But we are trying to bend capital from its path of least resistance.<\/p>\n

Ottawa can also overhaul the long-troubled foreign service, which has an important role in trade. Maybe it should be spared Mr. Carney\u2019s across-the-board cuts. And soft power must not be neglected. South Korea subsidizes K-pop; Thailand, Thai restaurants abroad. Ottawa should study the most efficient Canadian equivalent.<\/p>\n

Such efforts will not have nearly as much impact as a new pipeline or an upgraded port. But they can be easier to maintain over the long run. And that is what we must keep in mind: Europe is a difficult long game. If 20 years down the road, we turn that 10 per cent of exports to the continent to 15 or even 20 per cent, that would be as much success as we can ever hope for.<\/p>\n

Mark Carney: More from The Globe and Mail<\/p>\n

Campbell Clark: Timing is everything as Carney visits Europe \u2013 again<\/a><\/p>\n

Kevin Yin: Mark Carney is running the economy like a conservative. And that\u2019s okay<\/a><\/p>\n

Campbell Clark: Carney still has firm hold on who\u2019s in his inner circle<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Two days before Prime Minister Mark Carney\u2019s recent visit to Berlin, Canada put on a little show at…\n","protected":false},"author":2,"featured_media":452792,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5310],"tags":[9884,8999,2000,299,1824,24789],"class_list":{"0":"post-452791","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-appwebview","9":"tag-dei","10":"tag-eu","11":"tag-europe","12":"tag-germany","13":"tag-noastack"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115270598660321215","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/452791","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=452791"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/452791\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/452792"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=452791"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=452791"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=452791"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}