Canadian prime minister Mark Carney has declared that Canada will pursue a “unique security and economic alliance” with the European Union, positioning his country as a steadfast partner in what he described as a rapidly fragmenting global order. Speaking at the inaugural Canada Investment Summit in Toronto on Tuesday, Carney framed the deepening relationship with Brussels as a strategic necessity, one born of the fractures that have characterised trade ties with the United States over the past 18 months.
The prime minister’s address to investors, corporate leaders and government ministers struck a careful balance between urgency and optimism. He cast Canada as a “safe harbour” for foreign capital in an era of economic uncertainty, while acknowledging that the northern neighbour’s proximity to the US would remain an inescapable geographic and economic reality.
A Strategic Pivot Towards Europe
Carney did not shy away from the gravity of the moment. “The world is becoming more divided and dangerous,” he told the summit. “Sovereignty and openness are now in tension. Economic integration is being weaponised. Tariffs are used as leverage.” The remarks appeared to allude directly to the Trump administration’s widespread use of trade levies, which have severely strained relations between Washington and Ottawa.
Canada’s response, the prime minister said, rests on two guiding principles: the need to strengthen domestic capacity and the imperative to diversify international partnerships. “Taking care of ourselves means building our strength at home and diversifying our partnerships abroad,” he added.
That diversification has taken on tangible form in recent weeks. Carney has moved aggressively to deepen Canada’s economic and political ties with the EU, and he is set to become the guest of honour at the European parliament’s plenary meeting in Strasbourg this week. His itinerary includes attending European Commission president Ursula von der Leyen’s annual state of the union address on Wednesday and addressing MEPs on Thursday. Von der Leyen reportedly rearranged her schedule to remain in Strasbourg after facing criticism for an initial decision to skip Carney’s speech and return to Brussels — a gesture widely interpreted as an effort to signal the importance Brussels places on the relationship.
Canada is already the only non-European nation to participate in the EU’s defence procurement initiative, and Carney mused about the prospect of visa-free travel and work arrangements between the bloc and Ottawa, though he cautioned that discussions remain in their early stages.
The Domestic Pitch: Investment and Tax Incentives
The Toronto summit was as much about selling Canada to the world as it was about diplomacy. Carney announced a corporate tax “mega-deduction” allowing companies to immediately deduct 100% of the cost of new investment across a broader range of assets than previously permitted — a move clearly designed to compete with similar incentives offered south of the border.
He confirmed that the federal government was on track to balance its operating budget one year ahead of schedule, a claim that drew applause from the assembled crowd. Nearly C$500bn in new domestic investment was also announced by the prime minister’s office in the run-up to the event.
Four of Canada’s major airports will be opened to foreign investment in a bid to “unlock their true value,” Carney said, though he acknowledged that lessons would be drawn from instances where partial private ownership models had fallen short.
Erik Schatzker, the summit’s host, sought to frame Canada not as a passive observer of geopolitical upheaval but as an active shaper of it. “Canada is a protagonist. Canada has agency. Canada is defining its own future,” he told attendees.
Obstacles on the Road to Closer Ties
For all the enthusiasm emanating from Ottawa and parts of Brussels, significant hurdles remain. European officials are eager to bring Canada as close to the EU as possible without offering associate membership — a distinction rooted in the hard lessons of Brexit. The EU is determined to preserve the integrity of its single market’s four freedoms: the free movement of people, services, goods and capital. Any deepening of ties with Ottawa is therefore likely to focus initially on raw materials and energy cooperation.
Javier Moreno Sánchez, a Spanish socialist MEP who leads the European parliament’s Canada delegation, called for concrete steps from von der Leyen, including greater mobility for professionals, expanded student exchanges, and joint work on defence and artificial intelligence. “Canadians are the most European people outside Europe, and that is the key point for the development of our relationship,” he said.
Yet irritants persist. Ten EU member states — including France, Italy and Poland — have still not ratified the Comprehensive Economic and Trade Agreement (Ceta) nearly a decade after it was signed, meaning large portions of the deal remain unenforced. French lawmaker Valérie Hayer, a close ally of Emmanuel Macron, urged political leaders in Paris to act responsibly and push for ratification. His centrist Renew group is calling on member states and the commission to accelerate the process and launch an awareness campaign highlighting trade opportunities for businesses on both sides. However, with major elections looming in France, Italy and Poland, progress on the 10-year-old agreement appears uncertain at best.
The numbers tell a story of untapped potential. EU-Canada trade in goods and services reached €130bn in 2025, an 80% rise since Ceta was signed in 2016. Still, this pales beside the nearly US$880bn in commerce Canada conducts with the United States. Carney conceded the point openly. “We will always be neighbours, and Canada will continue to be the US’s most important partner in many key areas,” he said, adding that such arrangements flourish “when we engage as true partners that respect each other’s traditions and sovereignty.”
A Nation Divided in Its Ambitions
Not everyone at home shares the government’s bullish vision. Thousands gathered in downtown Toronto for the Many vs the Money counter protest ahead of the summit, arguing that public funds should not be deployed to insulate private investment risks while communities bear the social and environmental costs. Stephen Hill, a lone protester from British Columbia, stood outside the hotel as key figures arrived to hear Carney speak. “Mark Carney’s here selling Canada to the international community,” he said. “I’m Canadian. We’re an Aboriginal-led investment coalition. We want in. But you can’t get a returned email. You can’t get a returned phone call. You can’t get through to his ministers.”
Why it Matters
Carney’s European pivot is more than a diplomatic gesture — it represents a fundamental reorientation of how a major North American economy positions itself on the world stage. If successful, a closer Canada-EU partnership could reshape supply chains, defence cooperation and capital flows in ways that ripple far beyond either party. Yet with Ceta still unratified by nearly half the bloc, trade figures dwarfed by those with Washington, and domestic voices questioning who really benefits, the road ahead is anything but smooth. The coming year will test whether Ottawa’s grand ambitions can translate into lasting, substantive change — or whether the gravitational pull of the US economy proves too powerful to overcome.
