Since US voters re-elected Donald Trump in November, I’ve been arguing that the primary threat to Canada isn’t from his tariff policy, but from the fact that he’s dynamited the foundations of trust and certainty that have supported Canada-US cooperation for decades. Due to chronic US domestic instability, this trust is likely gone for years, if not decades.

The implications of this point are as clear as they are disturbing: North American relations are no longer based on sovereign equality and cooperation, but on hierarchy and dominance. Any negotiated agreement with the United States under these conditions won’t be worth the paper it’s written on. Any concessions offered by Canada would secure only temporary relief, to be withdrawn the moment it inconveniences the US. Such an agreement would serve only to bind Canada further to the United States, not as a junior partner, but as a vassal.

More concretely, as I argued in February in the Globe and Mail, it makes no sense to sign any agreement with the US under these conditions.

For these reasons, Mark Carney’s consistent strategy since before the election to pursue “comprehensive negotiations about a new economic and security relationship” with the United States has never made a lick of sense. He’s proceeded as if the problem is the tariffs, and that Canada could get a good deal if he could just convince the US that we’re stronger together than apart. North America Strong!

As I note in the Globe article, that would be a plausible argument if it were 2015. But thanks to Trump, “North America” no longer exists. There’s no more “we”: just “us” versus “them.”

Carney’s approach made no sense from the start. The reality of our situation, however, as well as the negative consequences from Carney’s strategy, may finally be starting to sink in. Carney has admitted that tariffs are likely here to stay, while BC Premier David Eby says that Canada and the US might not even be able to come to an agreement.

A wild goose chase

Let’s be clear: The entire pursuit of a “comprehensive” trade and security agreement has been a wild goose chase. It simply can’t deliver the certainty Carney obviously thinks it can. As Matthew Holmes, head of public policy for the Canadian Chamber of Commerce, points out in today’s Toronto Star, Trump. Simply. Can’t. Be. Trusted: “I think even if we get a deal Aug. 1, we could see him announce more tariffs on Aug. 2, or Aug. 7.”

And again, to repeat, the only way to get an agreement is to offer concessions in other areas – remember how Carney sacrificed the Digital Services Tax in exchange for the opportunity to continue negotiating a non-binding agreement with a serial liar? – that will buy us nothing lasting.

The problem is the uncertainty of an adversarial neighbour, not the tariffs.

To make matters worse, this wild goose chase has prevented Canadians from having the actual tough domestic discussions that are needed to actually get through all of this.

As Érick Duchesne and I explain in this just-published Policy Options piece, Carney’s “nation-building” projects are simply “a tired mix of recycled ideas and pet projects that could have come from any government over the past four decades.” Tax cuts, slashing government, cutting regulations, building a pipeline (which will take a decade and will deliver a product facing declining demand), ramping up military spending: These policies could’ve been introduced by pretty much any government over the past 40 years. This is inertia masquerading as innovation.

Flawed US policy, disastrous domestic policy

It would be a mistake to separate Carney’s fatally flawed US negotiation strategy from his domestic strategy: free trade (for Canada, free trade means free trade with the US) and minimal government are two sides of the same coin. The one implies the other.

For Carney’s government cutbacks to work at all (i.e., not decimate the country) would require stable access to the US market. Without that access, Canada’s entire economy, developed based on the assumption of continued market integration, is at risk. For example, it’s not clear at all to me that the Canadian auto industry – fully integrated into a North American (now US) market, starting with the 1960s Auto Pact – can survive under conditions of uncertainty. Canadians and Canadian businesses, dependent on digital infrastructure dominated by US tech companies that have bent the knee to fascism, are similarly vulnerable.

A government in cutback mode, one looking to cut corners, is likely to blow out the budget to provide haphazard relief to industries perceived to be deserving of aid. What such a government won’t do – and what is desperately needed – is to get active in developing a new economy that’s more resilient to US capriciousness.

We need government to do the exact opposite of pretty much everything Mark Carney is currently doing. We need bold, innovative thinking in government. We need more government, not less. We need governments with an industrial strategy beyond “Put AI in Everything” and leaving infrastructure planning to the private sector and the provinces to propose whatever’s on their pre-existing wish lists.

The depressing lack of imagination and vision demonstrated by the Carney government, and the provinces, is matched only by the imagination and creativity of Canadians, who understand what’s at risk, and that this is the time for boldness.

We highlight a few of these ideas in our oped – redoubling education spending to build up the knowledge economy, Canada victory bonds, addressing Canadian tech dependency, a youth climate corps – many of which we borrowed from the many Canadians who are rising to meet the moment. All of these are viable proposals for new and needed services, and creative, nation-building financing.

And where are the big swings internationally? Canada, trapped in North America alongside our dangerous neighbour, needs to make ourselves indispensable to the rest of the world. Why aren’t we making a play to relocate the UN to Montréal? Buying all the guns isn’t the only path to security.

Rejecting the old ideology

Minimal government, free markets, deregulation, free trade (or “almost free trade,” an Orwellian turn of phrase adopted by Carney as he’s scrambled to explain his US strategy): this has been the economic orthodoxy for the past 40 years. But the free trade era is over. “Almost free trade” is not free trade. And minimal government is completely inappropriate for our current moment. To continue to pursue policies developed for a world that no longer exists isn’t leadership: it’s ideological inertia.

Uncertainty in Canada-US relations is here to say. A new agreement won’t help. It will be very expensive to reorient the Canadian economy. Doing so will require more government capacity, not less. Canadians are ready for the challenge. They – we – have great ideas about how to improve our resilience. They need to be heard, and heeded.

Time to get real.