Ye reap what ye sow

Doing what's best for the Liberal Party continues to trump doing what's best for Canadian citizens

Over the course of a few decades on Bay Street, you’ll hear plenty of memorable lines. Not all of them will be off-colour, either.

In the wake of Prime Minister Mark Carney’s highly-acclaimed Davos speech, all I could think of was the time (late 90s) that a crew of Nesbitt Burns investment bankers returned to the office after a maddening meeting. Someone must have proposed resigning the mandate, and as they milled about in the hallway, Dan responded with about as much distain as he’d ever allow himself: “Sure, let’s fire the client.”

He shook his head and walked away.

As speeches go, I don’t doubt that Mr. Carney’s address at Davos was spectacular. That it generated a “rare” standing ovation from an audience that has sat through plenty of speeches over the course of their careers may seem like a far cry from the time that Justin Trudeau and Sophie Grégoire graced the cover of Vogue Magazine, but its all part of the same piece -

Looking abroad for validation from people who don’t wake up every morning, raise the kids, pay the taxes, and do their own small part to ensure that the unsexy machinery of Canada continues to grind away.

Whatever your politics or standard of living, I hope that we can all agree that our collective hands are largely tied (most of us, anyway, see prior post “Some Canadian Billionaires aren’t waiting for sanity to return” Dec 28-24): we occupy a particular physical square on the map of the world, with a certain set of natural benefits and lived history, a collection of legal traditions, massive and growing financial liabilities, religious and cultural diversity, and a swath of realities about our near-term economic opportunity.

Over the last 75 years, a combination of politicians, business leaders, investors, public servants, military chiefs, entrepreneurs and voters have made countless decisions that have left Canada in the boat she currently finds herself in. If we don’t like it, it’s not as though we have anyone to blame but ourselves.

Up until the 1950’s or so, dangerous, outlandish and difficult decisions were the norm. Great personal cost was the price of pursuing great feats.

Sir John Franklin, Samuel de Champlain, Etienne Brule are just three of the many who, along with their crews and local guides, risked life and limb to explore the New World.

General Sir Isaac Brock and Shawnee Chief Tecumseh kept the Americans at bay during the War of 1812, buying time for the formation of a new nation.

The Reciprocity Treaty of 1854 between the U.S. and BNA brought free trade in natural resources, but was summarily cancelled by the U.S. in 1866; annexation was one of the drivers, prompting four Provinces to band together in 1867.

In 1871, Sir John A. Macdonald, as Prime Minister of the Dominion of Canada, promised British Columbia that he’d get a railroad built within 10 years to prevent American Annexation of that key territory. As the Canadian Encyclopedia records it, Sir John “lured” B.C. with the pitch that “the proposed line was 1,600km longer than the first American transcontinental.”

At the opening Battle of the Somme in 1916, the Newfoundland Regiment Battalion had a fighting strength of about 929 at the start of that day, and “only sixty eight were available for roll call” just twenty-four hours later. If you were to visit the grave of an American soldier from that era, it was though the Great War hadn’t even started yet.

(High Street Cemetery, Hingham, MA, Jan. 2026)

Just one of many proof points that Canada can have independent foreign and economic policies so long as we maintain the foundation of what provides the freedom — the latitude — for that very independence. I’d argue that started to get whittled away in the 50’s, as a few examples will demonstrate.

The decision to cancel the Avro Arrow project in 1959 drove talented researchers to NASA, for example, and wound up ensuring that Canada would never again have a world-leading defense industrial base.

We signed the Treaty on the Non-Proliferation of Nuclear Weapons in 1968, less than a decade after the Bomarc missile crisis split the Cabinet of John Diefenbaker. As a nation, Canada refused to develop an independent nuclear program, meaning that we’d forever have to rely on the American nuclear shield — unlike India, Israel and Pakistan, for example. We had that luxury, I guess, knowing that no sitting U.S. President would ever allow the Russian Army to take an inch of Canadian soil.

When the government of Lester Pearson promised, in 1965, to fund a portion of Provincial medicare programs, that financial commitment was essentially funded by tax dollars that we didn’t spend on an independent nuclear weapons program. France and the UK went a different path, despite being permanent members of the U.N. Security Council.

The truism of “Peace through Strength” at work.

The 1965 Auto Pact meant that Canadian entrepreneurs would be unlikely to follow in the footsteps of Colonel Sam McLaughlin, but at least we’d have a shot at keeping those jobs in Oshawa, for example.

In the 1970s, Canadian business, academia and politicians wrestled with the influx of foreign capital and corporate takeovers. That a Provincial Premier had to go to New York to sell bonds to build Ontario highways or hospitals reflected the simple reality that there wasn’t enough capital within our borders to scale the society that voters wanted.

The 1989 Free Trade Agreement reduced trade barriers with the USA, and led to decades of industrial expansion, integration and modernization. All of which allowed us to keep pace — for a time — with the growth of the greatest economy in the world. The truth is, the Administration of Ronald Reagan was focused on one key piece: guaranteed access to our energy. Things like furniture, auto content and steel were truly secondary.

If an integrated economy meant that Alcan, ATI, Dofasco, Electro-Motive, Falconbridge, Imasco, Inco, John Labatt, Molson, Noranda, Petro-Canada, Seagram and Stelco would eventually wind up in the hands of foreign players, that was all part of theoretically uncontrollable globalization.

That France, Japan and the USA rebuffed foreign takeovers of their key corporate assets went largely unnoticed (see prior post “Jagmeet Singh, you need an issue voters can rally behind and I have just the thing” Sept 8-24). I once hosted Mel Hurtig for a speech at Western, and he warned us of the consequences of our naivete.

Then-PM Stephen Harper’s 2014 decision to attach 209 conditions to the Northern Gateway pipeline permit stands out as a self-inflicted wound, as both Justin Trudeau and Thomas Mulcair vowed to block the pipeline if they eventually won office. Mr. Trudeau’s majority in 2015 was quickly followed with legislation that made that pipeline impossible to pursue, and Enbridge (ENB:TSX) shareholders wrote-off $1 billion of project costs.

Just think how much stronger Canada’s negotiating hand would be today if we could ship our crude somewhere other than just (mostly) the U.S.A. Had the Northern Gateway been approved in 2014 and was currently under construction, you might not be seeing headlines about “100% tariffs” on a chilly Saturday morning.

But we are, and it ties back to choices — choices taken in Ottawa, China, Davos over the past week, and at several other key moments throughout the last 75 years.

Mr. Carney’s global insights were perfect for Tony Blair or the Chair of the Brookings Institute to deliver, but his Davos speech did nothing to advance what he claimed, back in May, was the number one priority of his government:

Establishing a new economic and security relationship with the United States and strengthening our collaboration with reliable trading partners and allies around the world.

As for the five MOUs Canada signed with China in the lead-up to Davos, it was only a few months ago when the PM told voters that China was “the biggest security threat” facing Canada. Until, that is, two members of Team Carney’s government (not military types) whispered to The Globe and Mail that the “Canadian Armed Forces have modelled a hypothetical U.S. military invasion of Canada.”

That spin was offered-up on the very news cycle immediately prior to a speech in which Mr. Carney accused (assessed?) that great powers were “using economic integration as weapons.” Read: America.

Had Mr. Carney travelled to China and Qatar as part of a “pragmatic” reaction to Canada’s need to diversify its trading and investment partners, few would have reason to criticize. Had he given a speech at Davos that spoke of the need for “middle powers” to carry their weight, he’d have been speaking a truth that might spurn nations like Australia, Denmark, Italy, Poland, Portugal and South Korea to do, well, I’m not sure what.

Increase defence spending? Australia is way ahead on that front. Get tougher on national borders? Poland is leading that charge. Improve trading patterns - since Portugal ($0.4B) buys about as much from Canada as pariah Iran ($0.3B) does, despite being a NATO ally with a free trade agreement, that’s definitely an opportunity. As is buying patrol submarines from Korea, while building a new Hyundai plant in Ontario (see prior post “Canada needs to wean itself off its relationship with the United States. Here’s how” Feb 5-25). But on what timeline? And would that backfill a material drop in U.S. two-way trade?

Even ECB Chief Christine Lagarde, a friend of Mr. Carney, doesn’t agree with his assessment.

In 2024, 76% of Canadian merchandise exports went to the USA (US$420B). The next 20 nations on our customer list bought US$104B of our stuff, in aggregate. There’s little we can do in the short term to double Germany’s current US$4.7B need/desire for Canadian goods — excellent idea though that is.

The #1 Rule in business is simple: don’t piss on your best customer’s shoes.

Mr. Carney surely knows this.

Having billed himself as the “responsible, experienced adult,” it’s passing strange that he’d drop a truth bomb in Davos, fire the client, and rush home to Quebec City for an entirely unnecessary Cabinet retreat — carefully avoiding Mr. Trump’s own Davos appearances.

To no one’s surprise, Mr. Trump called out Mr. Carney with his “Canada lives because of the United States” rebuke. Soon thereafter, Mr. Trump threatened Canada with 100% tariffs in the event we sign any deals with China (Mexico has already shown how quick China is to exploit backdoors to the U.S. market).

Mr. Carney: Ye reap what ye sow

A man reaps what he sows. Whoever sows to please their flesh, from the flesh will reap destruction; whoever sows to please the Spirit, from the Spirit will reap eternal life. Let us not become weary in doing good, for at the proper time we will reap a harvest if we do not give up” (Galatians 6:7–9).

Prior to the Davos speech, Mr. Trump had a jockular relationship with Mr. Carney. Progress! Having worked hard to land a trade deal, I understand the frustration that every deadline had been missed, to date. That’s no reason to give up.

Some of Mr. Carney’s grey-haired voters will surely say “you can’t do a deal with that guy.” Be that as it may, it’s a dangerous game given how many Canadian jobs are at stake.

The curation of the last few days only makes sense if the PM’s goal was to create an environment that somehow justifies calling another election.

There’s no other logical explanation for the one-two-three punch of i) Mr. Carney’s staff telling the media on Jan. 16th that he’d “accepted” Mr. Trump’s Board of Peace invitation (only to not show up for the actual event on Jan. 22nd), ii) a leaked “hypothetical U.S. military invasion of Canada” to fire up the Grannies, and iii) a speech later that day which made the Trump Administration “livid,” according to The Wall Street Journal.

As of today, he’s been downgraded to “Governor Carney,” a label that had previously been reserved for only Justin Trudeau.

It seems like only yesterday that everyone on the CBC was crowing how much Mr. Trump respected Mr. Carney, an arguably essential element to getting a new trade deal. As retiring Ambassador Kirsten Hillman said in a departure interview with The Star’s Tonda MacCharles: “It’s clear that President Trump respects Prime Minister Carney. There is no question of that. I don’t think it’s going to solve all of our problems and challenges, but it is certainly important that they have this strong relationship and line of communication.”

Having spent nine months to build that relationship up from scratch, why ever would you intentionally blow it all up? I can’t believe it was all an unfortunate accident, particularly given Mr. Carney’s pitch: that Canada needed a seasoned business leader to square-off against a rambunctious American administration, rather than an impetuous Pierre Poilievre.

Oh, the irony.

Welcome to the 2026 version of last year’s “Elbows Up” election strategy. And it sucks.

MRM

(note: this post, like all blogs, is an Opinion Piece)