As trade ties with the US continue to fray, Canada is seeking a new role and new partners in the increasingly fragmented global economy. Prime Minister Mark Carney has been courting more foreign investment as well as closer ties with the European Union and Asian economies.
Julian Karaguesian, former special advisor to Canada's Department of Finance and visiting lecturer at McGill University's Department of Economics, says Carney is seeking new markets for Canada's energy and critical minerals industries. "If you look at the last year, our exports to the United States fell by about 4 percent, and that cut [economic] growth. However, our exports to the rest of the world over the same period increased by 11 percent (...) so there's an adjustment going on."
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Karaguesian says that while trade ties between Washington and Ottawa "can recover" from recent tensions, the relationship between the neighbours may be permanently altered. "I see it as becoming more polite beyond Trump – a little more polite or maybe a lot – but I don't see it as changing much, because they need these moneys from tariffs, from taxes. It's not clear what happens after Trump, but I just don't see it changing that much."
He believes that Canada is an attractive bet for investors. "There is a lot of foreign interest in Canada, because we're offering a way of getting returns on investment that aren't in US dollars, because US bond markets and US dollar assets are looking, for lack of a better term, a little shaky; there's a lot of volatility. Canada is offering real equity stakes in the country's infrastructure, energy and so forth."
