Economic analysts are increasingly suggesting that Canada possesses all the necessary assets to become a global economic superpower. The fundamentals are undeniably strong. The country’s territory, the second-largest on the planet, is exceptionally rich in a vast array of natural resources, including minerals, energy, forests, and water. This natural wealth is paired with a highly industrialized economy, a modern and urbanized infrastructure, and one of the world’s most developed transportation systems. Furthermore, its population is highly educated, supported by a vast network of colleges, universities, and research institutions, many of which boast international reputations. The conditions are certainly ripe for sustained growth, positioning Canada to potentially become one of the world’s most powerful economies.
A Model Built on Dependency
Despite this immense potential, Canada’s current economic model is ill-suited for achieving that goal. The entire structure is based on two core principles: a deep-seated dependency on the United States and the sale of natural resources. The economy thrives on exporting raw materials like petroleum, steel, and aluminum, as well as highly processed goods such as automobiles, almost all of which are destined for the U.S. market.
This dependency is most evident in the control of strategic industries. More than half of the assets in the Canadian oil and gas sector are held by foreign interests, primarily American. The nation’s aluminum smelters are also largely owned by foreign companies, including the U.S.-based Alcoa. In a stark contrast to its G7 partners, Canada has no national automotive brand. Its entire auto sector is composed of foreign nameplates, a situation that leaves Canadian jobs perpetually vulnerable to relocations south of the border. This “easy” economic model, which satisfied the country for decades, now appears to be a critical vulnerability in the face of new American protectionism.
A Crisis of Confidence and Opportunity
This new reality is forcing a national re-evaluation of the near-total confidence Canada has historically placed in its main economic partner. The resulting uncertainty is palpable, acting as a direct brake on private investment and slowing overall economic growth. However, this profound challenge is simultaneously creating a unique opportunity. It is compelling the country to discover new avenues for development and to understand that its resources and expertise can be leveraged differently. It is, in effect, a chance to diversify markets and finally assert genuine economic independence.
The Government’s Keynesian Response
The federal government’s recent budget suggests it is embracing this challenge through a Keynesian lens. British economist John Maynard Keynes famously proposed that in a downturn, the state must intervene, using public spending to take the baton from faltering private investment. In that vein, the latest “generational” budget aims to “rebuild Canada” by running a $78 billion deficit. This strategy is explicitly designed to offset losses from U.S. tariffs and position the state as a powerful lever for development. The funds are earmarked for long-life public investments, including national defence, port facilities, roads, parks, and community sports centres.
This audacious plan is not without its critics. Some observers note the budget largely ignores the energy transition as a potential vector for economic growth. Moreover, serious questions remain about its effectiveness in stimulating private investment at scale and in addressing one of Canada’s most persistent problems: low productivity.
Case Study: A Battle in the Skies
This national push for a new, more assertive global identity is being mirrored in the private sector. The Canadian aviation industry, for instance, is currently navigating a historic turning point. An implacable battle is underway between the nation’s two reigning airline companies, Air Canada and WestJet. Taking advantage of a broader economic recovery, both carriers are aggressively redefining the country’s aerial landscape.
The two giants are clashing on all fronts. Air Canada, the country’s historic carrier, is moving to “lock down” the crucial North Atlantic market and consolidate its market share in Europe. In response, WestJet, long perceived as a regional company, is now claiming international stature, expanding its reach to southern destinations and beyond. This fierce domestic duel, driven by industrial ambitions, symbolizes Canada’s broader desire to reposition itself as a formidable global power.
