New piece from me in the Globe and Mail, in which I raise serious questions about Prime Minister Mark Carney’s overall strategy for dealing with the US. Simply put, if his goal is to bolster Canadian independence, his strategy of seeking a “comprehensive” (that’s the key word here) trade and security agreement with an obviously untrustworthy negotiating partner, representing a state that is, at the very best facing years, if not decades, of instability and at worst already on an irrevocable path to authoritarianism, dictatorship and fascism, makes no sense whatsoever. Comprehensive agreements are pathways to deeper, not less, integration. And in any case, a normal agreement isn’t on the table, because Trump has already shown us that he doesn’t respect any agreements.

It’s basically a reprise of the exact same argument I made back in February, when I argued that it’s no longer possible to negotiate any beneficial, lasting agreement with the United States so long as they’re on the path to authoritarianism. When I published it, I was gently surprised by the relatively unanimous acceptance of its argument, even by the comments section.

It’s not a hard point to grasp: agreements with authoritarians aren’t worth the paper they’re written on; Trump is seeking domination, which is the new foundation of North American governance; any agreement we sign will reflect this new reality and lead to an unacceptable loss of sovereignty; and so, we shouldn’t put our faith in any agreements or negotiations to save from a predatory US.

This time around, however, I’m seeing pushback on two fronts: that we should trust Carney because he’s a smart guy who’s only been on the job for a few months, so we should hold off on our criticism; and the Trump fever will pass so we shouldn’t panic. On top of that there’s also been a bit of “If you’re so smart, what do you think Carney should do?”

The fundamentals of Canada’s situation are exactly the same now as in February, which suggests that there’s more than a little motivated reasoning behind these arguments. But let’s see how they stand up.

Carney’s a smart guy. He knows what he’s doing. We should just trust him.

Intelligence, even brilliance, in one field doesn’t necessarily translate into intelligence or understanding in other areas. The belief that intelligence in one area reflects the ability to understand another area is known as the “halo effect.”

The thinking regarding Carney here is that because he was a central banker, he understands the economy and knows how to deal with politicians. In reality, the world of the politician, let alone prime minister, and the central banker are very different. A central banker’s remit is incredibly narrow: they only have one main job, keeping inflation under control. They don’t have to worry about things like immigration policy, or cultural policy, or public sector reform, or military and security issues. (Or political oversight, since by design they’re isolated from political pressure. If you want to know why Carney’s first instinct was to reduce oversight and consultation on big projects, that might be a useful starting point.)

Central bankers, by training and occupation, will tend to see the economy and society in a particular way. As a result, they will develop a deep understanding of the economy, yes, but a very partial one that excludes as much as it includes.

So, what’s Carney missing here? Basically, as I suggest in the Globe article, the politics of North American relations, and the conditions that have made productive Canada-US relations possible for decades.

One reason I have so many questions about Carney’s strategy and the seeming disconnect between his stated goals and his actions is I’ve seen this movie before. I’ve been studying Canada-US relations for over two decades now. My dissertation examined the conditions under which Canada and Mexico could exert policy autonomy in areas of great interest to the United States. When I see Carney propose a comprehensive trade and security agreement with the US, I note that this is exactly what a lot of right-leaning, pro-US-integration analysts proposed in the aftermath of the 9/11 attacks: Canada needs to sign some sort of trade-and-security grand bargain lest the US decide to crush us.

Such agreements must necessarily lead to deeper integration. That’s what “comprehensive” means: working out how you are going to work together over a vast number policy areas. Now, if this were 2002, we could have a discussion about whether such a move was in Canada’s best long-term interests. But it’s 2025, and the US is no longer a functioning democracy, especially right here and now, under Trump. Not only can Trump not be taken at his word, democracies and authoritarianism don’t mix: the terms of integration in 2025 will be much, much harsher and limiting than what might’ve been on offer in 2002.

If Carney were just talking monetary policy, there’d be more cause for trust (although as a former economist who specialized in monetary and trade policy, I can tell you that it’s much, much more political than you might think). While he’s gone all-in on AI, he hasn’t gone down the crypto rabbit hole like Pierre Poilievre. My guess is that’s Carney’s subject-matter expertise in action.

But Canada-US relations happens to be an area I know deeply, and what I’m seeing is raising a lot of questions, which I’ve been highlighting for months.

All this is why I don’t put any stock in the argument that Carney’s playing a long game. There’s a way to string things along and buy time to do… something? without putting deeper integration on the table. I’ll get to that.

But trying to force an agreement through an arbitrary deadline and offering concessions simply to keep talks going isn’t playing the long game; they’re the actions of someone who wants an agreement. Nor are tax cuts and slashing government the actions of someone serious about confronting the threat of a United States that is eviscerating its regulatory and statistical agencies. These changes will require less cooperation with the US and more program spending to make up for the benefits we used to get from regulatory cooperation.

It’s the old Reagan adage: Trust, but verify. When I hold Carney’s actions against what I know of how Canada-US relations work, and against his professed goals, I see deeds that don’t match words. That’s a problem.

2. The problem is Trump. We just need to get through the next two/four years.

This is exactly the view that world leaders adopted in 2017, and look how well that turned out for everyone. In 2017 it was short-sighted; in 2025 it’s inexcusable. It mistakes a symptom (Trump) for the problem (the collapse of US democracy and its institutions).

Trumpism will outlive Trump. The Republican party is now an authoritarian party that has rejected the rule of law. The courts have been turned into a partisan Republican institution, with different Supreme Court standards for Democrat and Republican presidents. The gerrymandered legislature is biased against Democrats, and Republicans have shown no interest in holding the Republican president to account. The electoral college! Media has bent the knee to Trump. Congress has just provided an insane amount of funding that will allow ICE to become Trump’s secret police. They’re disappearing people and constructing concentration camps, for fuck’s sake.

This is the problem facing Canada. Trump’s tariffs are the symptom of an authoritarian government that seeks domination, not cooperation. It’s a tactic, not the game. The very, very, very best Canada can hope for over the next several decades is extreme instability, as successive Republican and Democratic presidents tear up the agreements signed by their predecessors. A country can’t sign lasting, trustworthy agreements under such conditions, let alone the more-likely situation of continued authoritarianism, likely fascism and maybe even civil war.

So, no. This problem isn’t going away. I would dearly love to be wrong. I don’t think that I am.

Well, what do you suggest, Mr. Smart Guy?

It’s almost impossible to overstate exactly how much danger the United States poses to Canada’s democracy and autonomy. My problem with Carney’s approach is that it will lead to a loss of autonomy, but I don’t disagree with anyone who argues that we’re in a nearly impossible situation and that there are no easy answers. Kim Richard Nossal’s prescient 2023 book, Canada Alone: Navigating the Post-American World, will give you a good idea about exactly how bad things actually are.

The first step, though, is to recognize that dealing with a hostile authoritarian regime is different than dealing with a democracy. When you recognize this point, it takes certain options, such as a negotiated comprehensive trade and security agreement, off the table. Once you’ve made that mental move, it allows you to get a clearer, if deeply upsetting, picture of the actual stakes and sacrifices that may be needed.

We can’t get the tariffs down for a guaranteed amount of time that would allow deeper integration to proceed as before. Which means that we have to get used to the lack of guaranteed access to the US market. This doesn’t mean there won’t be any trade; it means that Canada-US trade will continue but be diminished under conditions of deep, unresolvable uncertainty. Deeper integration becomes a no-go. The auto industry, the foundation of Canadian economic development for decades, may no longer be viable, if we want to maintain our independence.

This raises the urgency of diversifying our markets and strengthening our internal economy. However, we should be under no illusions that this can be done either easily or completely. Canada’s been signing trade agreements willy-nilly for decades. The problem has been business follow-through. The loss of guaranteed US market access will make other markets relatively more attractive, but they will still need significant government support to make this work. It will require more government program spending, not less. Same with supporting the internal market.

Canada also has to strengthen its regulatory apparatuses and reduce regulatory and security cooperation with a hostile, MAGA US. This will also require more government regulation and spending, not less. Similarly, we need to start securing our information ecosystem from US misinformation and Meta-like news shutdowns.

We also can’t leave the question of what counts as a nation-building project to the private sector or the provinces, or you’ll end up with inertia-driven pet projects, the same-old, same-old. If we leave it to the market to plan the future, the future will look a lot like the past. We need actual leadership.

That’s all pretty dour, but there are other, more positive, things the government needs to do. Most importantly, Canadians need to be invited into the conversation about the future of the country.

That’s not happening. Where is the youth civic corps? The Elbows Up Savings Bonds? The defences of Canadian culture? The moonshots? Not to mention the attempts to build a more inclusive Canadian nationalism, including regarding Indigenous peoples?

Right now, the plan is: ram a few pipelines through, sprinkle AI on everything, buy all the guns, and voilà! Independence! All while eviscerating government programs and cutting taxes. For a plan that’s supposed to save Canada, Canadians are remarkably absent. If we’re facing an existential threat, you have to pay attention to Canadian culture and identity. That’s completely absent right now, and I think that’s Carney’s central banker blinders at play.

As for Canada-US relations, trading security or policy autonomy off against trade will only lead to disaster. Instead, Canada should treat US issues with the respect they deserve, but on their own terms. No trading off one issue against another. The line should be: “Canada has a long history of working with the United States to address issues of shared importance. We look forward to discussing this issue on its merits, and to exploring possible mutually beneficial solutions.”

At all costs avoid linking issues. That’s a form of extortion. It will only infect the rest of the relationship.

That’s how you string out a negotiation, not by offering concessions in advance.

Significant risks abound

That’s the plan. However, we should also be clear about its risks. US trade supports about a third of our economy. Losing even a bit of that will be an enormous hit to Canadians’ standard of living – try thinking through what the Canadian economy looks like without the US-integrated auto sector. None of this is good.

Similarly, US hostility to Canadian democracy will only increase, making us more insecure.

This all truly sucks, but that’s what we’re dealing with. Massive government investment in the Canadian economy and society is the best way to blunt these negative effects, but they will be negative, and they will be severe. That’s what sacrifice would look like.

Carney’s insistence that his approach will deliver greater Canadian independence obfuscates our actual choices. These are:

Deeper integration will blunt the short-term economic effects of Trump’s tariffs on the Canadian economy, but at the cost of a loss (potentially irrevocable) of Canadian sovereignty, independence, and likely democracy. But you’ll get tax cuts, and it’s compatible with market-led infrastructure projects to take a bit of the edge off. There are also no long-term guarantees that Canada will be treated “fairly” by an authoritarian US regime. We may sacrifice our autonomy to save the auto industry, only to lose it to the next round of crazy demands from a president who will always see Canada and Canadians as “them,” never “us.”

Greater independence, meanwhile, will require massive increases in Canadian government spending, higher taxes and more actual planning than we’ve seen in generations. It will create the foundations for a more secure, independent Canada, but we’ll also take a significant hit in lost GDP due to the unresolvable uncertainty around US market access.

And you can be sure that it will make US interests very angry. In a world in which US overall influence is declining, the importance of Canada to their economic and physical security will increase. We have to be ready for that.

Needed: More government, not less

Carney’s plan to cut taxes, shrink government (except the military) while trying to resurrect some form of free trade and integration with the US is a relic of a time that’s passed us by. It’s the orthodoxy that’s dominated since the 1980s. The Global Financial Crisis in 2008 should’ve killed off the idea that leaving things to the market is always best, but ideologies die hard.

In 2025, it’s positively dangerous, a poisonous vestigial tail. We need a new approach for our new world. What we’re getting is same old, same old. We need more government, not less; less US integration, not more; greater public involvement in the discussion, not their sidelining. We need a Canada that is materially and mentally capable of standing up to an authoritarian power.

That’s how you build a more resilient Canada. Nothing’s guaranteed, but it has a better chance of succeeding that the government’s current strategy.