Below is a lightly edited presentation I gave last night for Brock University’s Centre for Canadian Studies, at the St. Catharines Public Library. Coincidentally, I delivered it shortly before Prime Minister Mark Carney gave a speech in Ottawa outlining his vision for the upcoming (grudgingly delivered) federal budget. His speech confirmed my main argument: Carney believes that the crisis facing Canada is that “the U.S. has fundamentally changed its approach to trade, raising its tariffs to levels last seen during the Great Depression.” Carney’s entire domestic and international policy agenda is consistent with this view.

Carney’s narrow understanding, however, mistakes the symptoms – erratic, irrational US economic policy – for the actual disease: the long-term collapse of the norms that made positive-sum cooperation and even harmony across all economic and non-economic aspects of the Canada-US relationship possible, including the rule of law in domestic and international affairs. It pretends that the US threat is purely economic, not political. Utterly ignoring the governance patterns, including military and regulatory cooperation, that sustain Canada-US integration, means that Carney’s economics-only policies will almost certainly lead to deeper integration with the United States.

In my presentation, I argue that Carney’s use of what I call the Third Option language of decisive breaks and “elbows up” disguises a pedestrian status quo-oriented agenda that has doubly robbed Canadians. By wrapping status quo policies in transformative language, Carney is making it difficult if not impossible for Canadians to have an honest discussion about the costs related both to deeper economic and security integration, and those related to the steps the country would have to take to actually protect Canada from an increasingly politically unstable and authoritarian United States.

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First, I’d like to thank Anthony and the Centre for Canadian Studies for inviting me to give this talk, and the St. Catharines Public Library for hosting it. My first-ever volunteer job was at my local library, when I was nine or 10 years old. I can’t even remember how that happened, except that I’ve always loved books and loved being around books. So it’s always nice to work with our local library here in town.

It’s great to be here. But it’s also a very disconcerting time to be a political scientist, especially one whose background is in the study of Canada-US relations, with an abiding interest in the perennial question of the potential for Canadian sovereignty in the shadow of our southern neighbour.

When you study something deeply, you hopefully come to understand it. And this understanding gives you the ability, in a sense, to see around corners in your area of expertise, to see things before they might become obvious to others.

Right now, for political scientists, and particularly ones with my particular academic and professional background, US politics and Canada-US relations feel like a horror movie. You keep screaming at the screen, don’t go down to the basement, but of course they do and then the bad thing happens, just like you knew it would, because you’ve seen this movie before.

Consider the distance that Canadians have travelled in terms of the general understanding of the nature of the US crisis. When Donald Trump was first re-elected last November, I had to fight just to describe him as an “authoritarian” in the advertisements for a talk I was giving on Canada-US relations. Around the same time, I was disinvited from a radio call-in show, I suspect because I wanted to argue that Trump’s tariffs were a symptom of the deeper problem facing Canada, namely the rise of US authoritarianism.

It was annoying, but understandable. Really big changes are hard for people to process and can make them cautious. And last November, openly referring to the leader of what was previously the world’s leading democracy as an authoritarian still sounded like an overreaction to a lot of people.

But even at the time, in November 2024, seeing Trump as an authoritarian was not an outlandish view among political scientists, among those of us who study political systems in Canada, North America and around the world. As one of my Brock colleagues put it at the time, the only legitimate debate among political scientists about Trump was about whether he was simply an authoritarian or whether he was also a fascist.

As a discipline, our mood is pretty bleak. At the beginning of this crisis, I asked another Brock colleague a question: Given our current situation, and given what’s possible, what would constitute success for Canada? He got really quiet and after a moment said, I don’t like to think about that.

Yeah, we’re a lot of fun at parties.

That said, it didn’t take long for regular Canadians to catch up with us on what was going on south of the border. Fast forward two months, to the 4 nations cup, and it was pretty clear Canadians had gotten the message that Trump was an existential threat to Canada.

Amazingly, our visceral, grassroots reaction to Trump has continued. Travel to the US, especially of the non-business variety, continues its record declines. The boycott of US goods, especially at the grocery and liquor stores, continues. In our own household, the only US goods we regularly buy now are laundry detergent, because I can’t seem to find a made-in-Canada alternative, and cat food. Anyone with a cat will understand that there are some lines you just can’t cross.

And now Trump is kidnapping US citizens and exiling people to to foreign gulags, he’s harassing Canadians and others at the border, he’s taking stakes in US tech companies, he’s flouting the courts, and even tearing down the East Wing of the White House, to name only a few things. So these days you don’t hear many people saying, well, maybe he’s not an authoritarian. Political scientists like me are also getting less pushback when we refer to Trump as a fascist, which he is. Now, the conversation has moved on to whether there will even be free and fair elections in the US next year.

At least that’s the case in most corners. Because as much as I think most Canadians get that Trump poses an existential threat to Canada, there remains a disconnect between, on the one side, the vociferousness of Canadians’ attitudes and the ongoing grassroots boycotts, and, on the other, how the Canadian government is approaching our current situation.

Assessing the Carney Strategy

In the publicity materials for this talk, I said I would assess the Carney government’s strategy for dealing with Canada-US relations, and whether or not it’s meeting what I think is our common desired goal of maintaining Canadian independence, or sovereignty.

Well, it turns out that this is actually a pretty challenging assignment, for two reasons.

First, the Carney government – which is to say Mark Carney, since at this point he pretty much is the government – is remarkably tight-lipped about why they’re doing what they’re doing, both with respect to the US and his domestic policy. His government is making announcements and doing a lot of things, but they don’t really explain themselves. There seems to be little planning going on, in public or behind the scenes, just action.

For me, the most surprising thing about Carney, given his economics background, has been his extreme reluctance to even provide a budget. He had to be pushed to deliver one this year, in a couple of weeks, as opposed to next spring sometime. Or even to provide any deep econometric analyses justifying his many proposals, whether it’s regarding AI or his hand-picked infrastructure projects. This has allowed both critics and stans to speculate about what he’s actually doing and why he’s doing it.

But the second thing, as an increasing number of people have noted, is there appears to be a rising disconnect between Mark Carney’s professed goal of increasing Canadian independence, and his action regarding the US.

On this point, people have tended to focus on a couple of things: his late-June sacrifice of the Digital Services Tax to convince Donald Trump to continue negotiating toward a comprehensive trade and security agreement; and his embrace of deeper military integration with the US through the proposed US Golden Dome ballistic missile defence program.

Behind the scenes, Chantal Hébert – who’s probably Canada’s most respected parliamentary journalist – has reported an air of panic in the government, as they seek to deliver any kind of agreement, preferably before the budget in a couple of weeks, and also less of a focus on technocratic policy than playing to the politics of their situation.

At the same time, though, the Prime Minister has also started a number of projects under the banner of “nation-building.”

These include proposing a number of infrastructure projects that he claims will strengthen the Canadian economy. Though it might be more accurate to say that he has re-announced programs that were already on their way to completion. And his plans seem to be moving Canada away from the possibility of creating an environmentally sustainable economy for our descendants.

He has engaged in trade talks with other countries, most notably Europe as well as China and Indonesia, even though Canada’s problem since the 1990s hasn’t been a lack of trade agreements but a lack of support for Canadian businesses seeking to break into difficult overseas markets.

He has also promised an orgy of defence spending while cutting taxes and seeking steep cuts in non-security areas.

So what can we make of all this? Is he selling out the country, as his critics would have it? Or is this all some 10-dimensional chess game designed to buy us time so that we can, at some point in the future, actually distance ourselves from the US?

The unacknowledged debate

I think a big problem for our understanding of what’s actually going on is that Canada is engaged in an unacknowledged debate over the nature of the US threat.

And our understanding of this debate isn’t helped by the fact that Carney’s more-nationalist rhetoric is on one side of the debate, while his actions and policy proposals are on the other.

So what are the sides of this debate?

The first side sees the US threat primarily, almost exclusively, in economic terms. From this perspective, the problem is an erratic, untrustworthy US president with a self-harming, and Canada-harming economic ideology. From this perspective, persistent uncertainty and an inability to rely on the US market for our ongoing prosperity is what we need to address. I believe Mark Carney and many key political and business actors fall in this camp.

In contrast to this view, the second side of the debate sees the unfolding economic disaster as a symptom of a much deeper, political governance challenge: the collapse of the conditions that allowed for decades of positive-sum economic, political and social cooperation that was the envy of the world, and the rise of authoritarianism and fascism in the US. From this perspective, any attempts to gain relief from superficial tariff issues will end up backfiring, and will end up increasing Canadian integration with a collapsing United States. I believe that most Canadians are on this side of the debate, and they thought that Mark Carney was, too. I’d also put myself in this camp.

Whether or not Carney’s strategy is up to the task depends on which view is correct. Tonight, I’m going to argue that Carney’s tariff-focused approach misunderstands and underestimates the scale and nature of the US crisis, which is authoritarian and fascist in nature, and will almost certainly outlast Trump. Far from delivering greater autonomy, it will create the conditions for greater dependence on an increasingly unstable United States. If Canada is to survive, we will need to undertake actual transformative change that does not shy away from a full, public discussion of the nature of the crisis and what addressing it will cost if we want to preserve our democracy.

That’s a tall order. But as daunting as our current moment is, at heart it’s just a very high-stakes version of the challenge Canada has always faced: what should our relationship with the United States be? Which means we can look to history for some guidance as to what our options are.

The old new debate

The Liberal External Affairs Minister Mitchell Sharp set out the modern debate way back in 1972. That era was also marked by international upheaval and a, shall we say, restless United States that wanted to change its place in the world. At that time, Canada was also considering its options regarding its relationship with the US.

Canada, Sharp argued, had three options: the status quo, deeper formal integration, or consciously seeking to distance ourselves from the US.

The First Option: The Same Old, Same Old

There was the first option, a modified version of the status quo. Policy in this approach would react to circumstances as they arose but wouldn’t involve any fundamental change to how things were done. This reactive element meant that it could involve things like trade diversification or taking steps to strengthen the domestic economy. But the key point is that it would be reactive and wouldn’t address underlying governance patterns that reinforce the status quo.

And because the status quo is driven by inertia toward deeper US integration, it would likely lead to deeper integration, intentional or not.

To give away the ending, Mark Carney’s approach to dealing with the US fits squarely within this First Option.

I say this for a few reasons.

First, none of Carney’s policies would have been out of place coming from any Conservative-leaning government over the past 40 years.

• Tax cuts and government austerity have been part of that playbook for decades.
• So has increased defence and security spending, the only area of government spending that conservative policymakers routinely embrace.
• Large, extractive resource infrastructure projects? Check.
• Deregulation? Check.
• And signing trade agreements has been a bipartisan sport since the 90s. But as I said, the real challenge has been supporting Canadian businesses to enter non-US markets.

Second, Carney’s instinct from the very beginning, even when he was embracing that elbows up rhetoric, was to seek, in his words, a comprehensive trade and security agreement with the United States. He sacrificed the multi-billion-dollar Digital Services Tax in the quixotic pursuit of such an agreement. And renegotiation of the USMCA along with deeper military integration through the Golden Dome remain explicit objectives.

He has also ignored, or retooled to US advantage, key areas of US influence related to communication and digital policy (like social media regulation), regulatory cooperation, migration, such as the now-absurd Safe Third Country Agreement, and military cooperation. On that last point, it doesn’t matter where you buy your weapons if you’re still on Team USA, as Carney and the Canadian Forces have repeatedly said they are.

So that’s what I mean when I say that his approach is reactive.

The Second Option: Deeper integration

The second option, deeper formal integration, has been Canadian policy since the 1989 Canada-US Free Trade Agreement.

The payoff from deeper integration, as Sharp noted, was supposed to be greater certainty in the relationship and greater prosperity. And the second part arguably has worked out, mostly. However, he warned that once undertaken, it would likely be irreversible because of the links and dependencies it would create. What’s more, he noted that there was nothing keeping the United States from simply changing the terms of the underlying bargain whenever they wanted. This was also the argument of the anti-free-traders who fought against it in the 1988 free trade election.

For those of us who lived through that election, it’s cold comfort to know today that the free-trade critics were right, and that people who ridiculed them as deeply unserious people owe them an enormous apology. It turns out the critics were the clear-eyed, sober ones.

The Third Option: Charting a new path

Finally, the Third Option, formal reorientation of Canadian economy and society away from the United States.

This, I would argue, is what Canadians thought they were signing up for when they voted for Mark Carney’s Liberals. The Third Option involves a conscious and fundamental reorienting of the Canadian economy and society away from the United States. As we’ll see, it’s about more than trade. It involves creating new forms of governance to counter the integration-focused linkages and tendencies that have built up especially over the past 40 years.

The downside to the Third Option is the same now as it was then: It’s very expensive and requires a great deal of conscious effort, led by an activist government, to reorient Canadian society away from the US.  

Desperately seeking certainty

The Second Option of deeper integration has become our status quo, so what we have in practice is an unacknowledged debate between the First and Third Options.

It’s been difficult to discuss these issues because the Carney government has been using the rhetoric of the Third Option while pursuing a reactive First Option. As a result, we haven’t had a full debate of either the consequences of deeper integration, or of the high costs that actually pursuing greater independence and protection from US authoritarianism would entail.

To give you a sense of this missing debate, let’s start with one word: Certainty. And a question: Should Canada renegotiate the United States Mexico Canada Agreement, or USMCA? Which is a question I asked in a Globe and Mail oped back in February. The answers people give are very revealing of how they view the US threat to Canada. And they nicely map onto the First and Third Options.

Quick reminder: the USMCA was the agreement Donald Trump negotiated with Canada and Mexico under duress in his first term, to replace the 1994 North American Free Trade Agreement, which he ripped up. Unusually for trade agreements, it mandates a renegotiation after six years from its implementation, which is next year, 2026.

Those in the First Option camp tend to see the US threat as primarily economic. Supporters of this position include the Business Council of Canada, Quebec Premier François Legault, Ontario Premier Doug Ford, the Carney government, and Mark Carney himself.

They correctly note that these tariffs, as well as Trump’s erratic nature, are a death sentence to an economy that has become ever-more integrated with the United States’, particularly since the 1989 Canada-US Free Trade Agreement. According to Scotiabank Economics, exports to the US were responsible for about 19% of Canadian GDP in 2023. So Canada has a lot to lose, which certainly weights on everyone’s mind.

From this perspective, uncertainty and an irrational US government that’s harming both US and Canadian economic interests is the problem. The main policy proposal from this perspective is for a renewed USMCA to restore the certainty needed for businesses to plan, invest and trade in the US market.

The bet here is that the US is acting irrationally and will come to its senses, either with Trump’s death or his removal from office. At which point even Republicans will come to their senses and realize that they’re better off working with Canada than always trying to undermine us and turn us into a 51^st state.

The goal is certainty. Mark Carney said this directly last week when Stellantis moved its upcoming Jeep line to Texas from Brampton. [The quote: “Until a more certain trade environment for the North American Auto sector is established through the upcoming review of the Canada-United States-Mexico Agreement, decisions on new investments in the auto sector will continue to be affected.”]

We see this in Doug Ford’s Fortress Am-Can proposal, and of course in the overarching focus on renegotiating the USMCA.

We also see it in arguments made to preserve the Canadian auto industry, that correctly point out that the US auto industry would be weaker if it ceased to be integrated on a North American scale.

Auto industry arguments may not work this time

Since it’s in the news, I should probably address the auto industry directly.

Two things. First, the proposals and arguments I just mentioned are all arguments for deeper integration. A good economist would tell you that if you want to see what a person truly believes, look at what they do, not what they say. They call that “revealed preference.” Carney’s actions show that his revealed preference is for deeper integration.

The second thing is, a lot of people in the government and the auto industry believe their killer closing argument is that harming the Canadian auto industry would hurt the US auto industry, because it’s continentally integrated.

But I don’t think that argument is as strong as they think it is.

On the facts, this argument is absolutely correct. And twenty-four years ago, it wasn’t just correct, it was effective.

After George W. Bush slammed the border shut on September 11, 2001, it was the heads of the US auto industry who successfully lobbied him to reopen it to commercial traffic.

But that argument won’t necessarily work today, for two reasons.

First, it assumes that the US is most interested in economic prosperity. But even though Bush reopened the border for the auto makers on 9/11, in the long term the US – and this was a bipartisan consensus – thickened the border. This cost them directly in terms of increased security spending, but also in terms of foregone economic efficiencies and prosperity. The lesson here is that sometimes countries put other goals above economic growth. These goals don’t have to make sense to us, only to the people making the decision.

The second reason this argument isn’t as strong as it once was is that back then, the US democratic system was more or less functional. Politicians in a democracy don’t like recessions because they make voters angry. And shutting down Canada-US trade would cause recessions in those states that depend the most on Canadian trade. A recession would upset voters, who would take it out on their elected representatives. That’s why US politicians care about Canada-US trade.

But the US is no longer a functioning democracy. At the very least, it’s run by an authoritarian, and authoritarians, by definition, care less about what voters think than democrats. So that political-economic link is broken. In other words, it could be completely rational for an authoritarian US president to break the Canadian and the continental auto industry. Or even to keep tariffs in place at the cost of harming their own economy. Because the authoritarian political calculus differs from the democratic calculus.

However, if you believe that your opponent is economically rational, like you, then you’re going to miss that entire dynamic.

Carney’s big bet

If you believe that US economic policy is irrational and transient, and that the problem is uncertainty, you’re going to act in a certain manner.

First, you’re going to resist truly radical changes. The problem is uncertainty, not your underlying understanding of how economic prosperity is created. That’s not to say that you’re not going to do anything, but you’re not going to do anything out of the ordinary. You’re going to adopt a strategy of hedging your bets, not wholesale change.

Second, you’re going to play for time until sanity returns to the US, by which I mean they realize that they’re better off with us than without us.

Third, you’re going to try to seek certainty, by negotiating new agreements, like the USMCA or Fortress Am-Can.

Fourth, you’re going to tend to ignore non-economic areas of the Canada-US relationship, or see them exclusively through an economic or economic deal-making lens. Things like Canada-US military relations, social programs, the border, our communication infrastructure and our regulatory agencies become distinctly second-tier issues.

The Carney government is doing all of these things. And they make sense, so long as their underlying assumptions about the nature of the crisis are correct.

Certainty is impossible

Of course, the counter to this line of thinking is pretty obvious: any agreement signed by Trump obviously isn’t worth the paper it’s written on. Which means that any concessions that Canada offers will buy only temporary relief. At best. Until the next time. In other words:

Certainty is impossible. And we just have to deal with it.

This is the perspective underlying current support for a Third Option-type approach to Canada-US relations. From the perspective of those favouring the Third Option, the tariff chaos is a symptom of a deeper underlying problem: that the foundations that made possible decades of positive-sum Canada-US cooperation and even harmony have been destroyed, and replaced with a more authoritarian, hierarchical model of North American governance.

This means, at a most basic level, that expecting that a new USMCA can deliver certainty is wishful thinking, an example of cargo-cult policymaking.

I call it cargo-cult policymaking because the very conditions that made NAFTA, and deep military integration, and much else besides, possible no longer hold.

Deep Canada-US relations worked because of the presence of four norms.

• First, US self-restraint. Its leaders over decades mostly understood that the US would be better off in the long run if they didn’t always play the bully.
• Second, respect for the rule of law. Countries respect their legal and treaty obligations.
• Third, respect for national sovereignty.
• And fourth, a norm against linking problematic issues to other areas in the relationship. That norm made it possible to manage a hugely complex and intertwined relationship like Canada’s and the United States, so that even persistent problems like softwood lumber are treated on their own merits, and don’t end up derailing the entire relationship.

You can probably see where I’m going here.

Canada-US relations’ problems predate Trump and will outlast him

These norms no longer hold, largely because of Trump. But they were in trouble even before he showed up.

There have been more and more signals that trade agreements, that is, the Second Option, haven’t and can’t deliver the certainty promised us. As Sharp correctly noted, the US has always reserved to itself the right to change the conditions underlying North American governance at their whim.

We saw this after 9/11, when the US decided that no matter what NAFTA said, they’re going to prioritize border security over economic integration. That also jeopardized the Canadian economy and we had to scramble to react.

We also saw this after 2016 Trump election and the replacement of NAFTA with the USMCA. And we’re now living through a third shock.

The lesson from 24 years of experience should be that stability in Canada-US relations is an illusion, even when we’re dealing with non-fascist governments that are committed to cooperation.

US respect for the rule of law in general has also been declining for over a decade. Many of you in this room will recall how the US flouted international law over its invasion of Iraq and the many subsequent torture scandals. And that was followed by Barack Obama’s beginning of US undercutting of the World Trade Organization, by blocking specific appointments to its appellate body, which handles dispute settlements.

I mentioned the USMCA’s renegotiation clause a bit earlier. That clause is itself a direct example of the reduced US respect for international law. When you’re negotiating a treaty like this, everything’s on the table. But the whole point of trade treaties is that once you’ve negotiated one, it’ll protect the smaller country from coercion from its larger partners. So they can’t threaten our auto industry if we don’t do a deal on softwood lumber, say.

But if your agreement has a renegotiation clause, that’s as good as giving the larger country a veto over the smaller country’s social and economic policies, both those currently existing and those that we might want to put into place in the future.

For example, if you think that any online harms bill Canada might try to reintroduce isn’t being drafted with this chilling US pressure in mind, you’re in for a rude awakening. Again, this isn’t a Trump thing: Biden started the attack on Canada’s Digital Services Tax via the USMCA, and you can be sure that Harris would have done exactly the same.

So, the move toward coercive power as the norm in Canada-US relations has been building for a long time now.

And even beyond all that, there’s no reason to expect that an agreement can deliver certainty. Even if the Democrats somehow win in 2026, even if they take back the White House in 2028, Trump’s MAGA voters are still there. The Republican Party remains the only other viable party in US politics, and both are wholly authoritarian.

Which means that at some point, likely sooner rather than later, they will be back in power, and any Democratic laws and agreements will be ignored once the Republicans come to power, in 2, 4 or 6 years, and vice versa – too short a timeline to deliver certainty for business.

One other sobering thought: As US global power declines, and that’s pretty much inevitable now, Canada’s strategic importance to the US, for minerals and security, will only increase. Which will make it difficult for any president, Democratic or Republican, to allow Canada much leeway in its affairs, say by playing China or the EU off the US.

All this to say, Carney’s approach to economic reform is placing an enormous bet on economic rationality and certainty returning to Canada-US relations.

The upshot of this longer-term trend is that which means we can’t necessarily wait for the Trumpian fever to break and rational Republicans to take power. This is our new reality.

Notice also that none of this assessment really touches on the biggest problem, that the United States is quickly moving in the direction of becoming an authoritarian, if not outright fascist, country, full stop.

Authoritarianism is the problem

In the 1970s, support for the Third Option was driven mainly by economic uncertainty and a newly nationalist desire for a Canada that had recently celebrated its centenary to strengthen its national identity, to avoid becoming too American. Those were the stakes. The worry was that deeper integration would erode Canadian identity and harm us economically.

Those two things are still on the table, but the US descent into fascism, as well as the damage it’s already done to the rule of law and its regulatory agencies, have further raised the cost of deeper integration.

The United States of 2025 is not the United States of 1972, or 1988, or 2001. Formal and proposed deeper integration with a US from those periods at least was or would have been integration between two similar liberal democracies. That’s no longer on offer.

The United States no longer seeks to be first among equals, or even to have Canada as a junior partner. It seeks domination. Any agreement with the US will reflect those terms.

In the 1980s, for all of their problems and for all of the exceptions to the rule, the US and Canadian militaries could be said to share similar values related to respect for human rights and international law. That is no longer the case. The US military has already murdered Venezuelan citizens on the high seas. At what point will joint Canadian-American forces be involved in a similar situation? What of Canada’s respect for international human rights laws?

And that’s without getting into the F-35 fighter jets, whose very functionality requires that they be updated from the US before every mission. In other words, these jets will by definition always be under US, not Canadian, control.

Also, autocracy doesn’t tend to stay contained within its borders. Will the US tolerate dissent from a future prime minister?

The US tech and social media giants have already pledged fealty to Trump. Microsoft has said in a French parliamentary hearing that it would follow US law in turning over data on French citizens on its servers located in France to US authorities. This isn’t just a French problem. Pretty much every Canadian business, government and individual’s information travels over US companies’ networks or is stored on their servers. And given that the US administration has zero respect for due process, this should be very concerning to all of us.

What about US control over our social media? We’ve seen how social media can be manipulated to shape public opinion, or to cut off news sources in times of national emergency, as with the wildfires a couple of years ago. We should be concerned that our main information sources are now largely under US, authoritarian control.

Or consider how much of our health regulation depends on regulatory decisions made in the United States, by agencies that have been eviscerated by anti-science zealots. For example, some 85% of drug manufacturing site inspections of drugs supplying the Canadian market are conducted by foreign regulators, 60% of those by the US. The Carney government has been silent on these issues.

I’m only scratching the surface of how the US threat is actually a governance threat to Canada.

A Third Option for 2025 and beyond

If we want to adequately address the US threat to Canada, we need to take into account the entire interdependent relationship. This will require far more than the reactive approach of the current government. It will require changes in how we run our society and rethinking the government’s role. So what would following a Third Option look like?

I can only sketch out a partial answer tonight, but here is what you should look for in a response that fits the scope of the problem, a Third Option that fit our current circumstances.

First, we need to increase government capacity to plan and regulate. This is the most fundamental thing. We need more government, not less. Instead of spending its time looking for things to cut, the Carney government needs to charge the civil service with identifying areas in which they can expand and transform the economy, beyond the AI flavour of the month.

An austerity agenda treats government as a problem to be minimized, not as a catalyst for growth and to strengthen society. Canada Post is a good example of this. Rather than simply try to privatize its current functions, why not repurpose it as a postal bank, or give it a mandate for delivering public online services, such as a Canadian search that wouldn’t be reliant on Google?

The private sector isn’t up to this task of reforming the country because the market itself is in flux and remains tilted toward the United States. Government needs to provide greater support to Canadian business directly to help them to diversify their markets. Government also needs to engage in forward-thinking planning that goes beyond taking whatever years-old infrastructure projects happen to be on the shelf. We need government to take an actual leadership role.

We also need government to improve its regulatory capacity, to both set and enforce rules. We’ve depended on the US for this for too long.

All of this costs money to develop and deploy expertise. But it’s necessary. And you can’t do this under conditions of austerity.

Second, we need a whole-of-government and whole-of-country audit of Canadian digital vulnerabilities to US coercion. Cross-border internet traffic exposes Canadian communication to US laws (such as they are) and authorities. All of Canada – individuals, businesses, government, the military, security services – is highly dependent on US digital service providers that expose us to severe privacy and security risks.

Third, we need a healthy Canadian information ecosystem. High-quality information is the lifeblood of any democracy. It can’t be left to the good graces of US companies with ties to an authoritarian or any foreign government.

Fourth, economically, we need to start thinking about what we want the future economy to look like, and start planning for that. Right now the government is long on natural resource extraction, an industry of the past if ever there was one, and short on the services and education sectors that actually drive economies in the 21^st century. Carbon is on its way out. China is driving a green economic revolution. We don’t want to be left behind. But if we keep betting on pipelines and LNG, that’s exactly where we’ll be. We need to go where the puck is going to be, not where it was.

Fifth, governments can be pro-active in shaping North American governance. The United States is transforming itself, and although authoritarianism has the upper hand, it won’t necessarily win. Canada should act with the understanding that consolidated authoritarianism south of us will be a death knell, not just for the Canadian economy, but our society.

That is our overarching national interest.

So we need to work to avoid that, to build a North America that will work in our favour. Franklyn Griffiths from the University of Toronto, had a really interesting suggestion in the Globe and Mail a few weeks ago: start building alliances and institutional frameworks with national and subnational pro-democracy groups through what he calls an Assembly for Democracy in North America.

This includes not just states and cities throughout North and Central America, including Greenland, but also First Nations, Métis and Inuit in Canada. In fact, reformed governance among Canada and the First Nations, Inuit and Métis is just the kind of creative response to a regional governance crisis that we could use. No group has been as resilient in the face of overwhelming adversity than Indigenous peoples. There’s something there to build on, in cooperation.

Finally, Mark Carney’s co-opting of Third Option rhetoric to pursue First Option-style governance has prevented us from having the hard national conversation that we need to have. We need an honest discussion of our options and alternatives, about the potential benefits and the costs. This is far too important to be left to a single person, let alone one who has an aversion to consulting with others. We need to hear from everyone.

Since February, I’ve heard so many good and doable ideas about how to improve the country, calls for everything from a Canadian youth civic corps, to retrofitting our infrastructure, to a cross-country rail system that actually works, to a new Canada Victory Bonds to raise money to pay for all of this.

But what we’ve gotten is a one-man show, and not a particularly imaginative one.

Some colleagues and I have been calling for months for a Royal Commission to work through all of this. That might sound staid and the kind of thing that only a political scientist could love. But Royal Commissions are the traditional means by which Canada has confronted and planned for big changes. And there’s no reason why one would have to take a lot of time, either, given advances in communication technology. But there is an allergy in Ottawa to thinking ahead.

We need to start this planning, not just to come up with a positive plan for the future, but to be honest with ourselves about the costs and the stakes.  Here’s what I mean, and I’ll end with this.

The sobering conclusion

Mitchell Sharp’s writings in 1972 contained a chilling warning that puts our current situation into context.

At the end of the day, he wrote, the ability of Canada to follow any of these options, including the Third Option, depended on the benevolence of the United States. He didn’t see this as a problem because, as he wrote, the two countries were so similar and had such a coincidence of interests, on democracy and human rights and sovereignty and multilateralism and liberalized trade, that even Canadian assertions of greater independence would eventually be accepted.

But today, in 2025, we can no longer count on US benevolence. We no longer share these values. The US seeks dominance. And Canada remains of strategic importance to their prosperity and security. These are sobering thoughts that need to be factored into any of our plans.

But first we need to have that conversation. While it not might be clear to most people yet, Canada is still in reaction mode. We’re still in that horror movie, walking deliberately down the stairs into the basement, oblivious to the peril that every horror fan knows awaits us.