Economic diplomacy and domestic discontent: Canada’s dual crisis

Dr. Shamim Ahmed
9 Min Read
Highlights
  • Trump’s rhetoric during the Canadian election campaign was unprecedented, his repeated assertions that Canada should become the 51st U.S. state were met with widespread backlash from Canadians and dominated discussions

Dr. Shamim Ahmed

The Canadian election process is both a reflection of its enduring democratic traditions and the shifting contours of its political landscape. As I watched the recent federal election unfold, I was struck by the intensity of the campaign, the shifting public sentiment, and the undeniable influence of external factors, particularly the outsized presence of U.S. President Donald Trump on Canadian discourse.

Canada operates under a parliamentary system, meaning that citizens vote for Members of Parliament (MPs) rather than directly electing a prime minister. The leader of the party that secures the most seats in the House of Commons typically forms the government. This time, the Liberal Party, under the leadership of Mark Carney, emerged victorious in a landslide, marking the end of Justin Trudeau’s nearly decade in power. Trudeau’s popularity had waned in recent years due to rising inflation, economic unease, and a growing sense of fatigue among voters. His resignation earlier this year paved the way for Carney, a former central banker known for his economic acumen, to take the reins. The transition from Trudeau to Carney has been swift. Carney met with Trudeau soon after the election to discuss the handover, ensuring a seamless shift in leadership. His immediate focus has been on stabilizing Canada’s economic outlook, particularly in light of Trump’s aggressive trade policies. Trump’s rhetoric during the Canadian election campaign was unprecedented, his repeated assertions that Canada should become the 51st U.S. state were met with widespread backlash from Canadians and dominated discussions. These provocations forced voters to consider which leader was best equipped to handle the escalating tensions with the United States.

Carney’s first meeting with Trump was highly anticipated. While the two leaders exchanged pleasantries, the underlying tension was unmistakable. Trump praised Carney as a “very good person,” but reiterated his administration’s push for trade concessions. Carney, in turn, firmly declared that Canada was “not for sale,” diplomatically shutting down the annexation talk. The meeting set the stage for what promises to be a complex negotiation process, with Carney aiming to secure a fair trade deal while maintaining Canada’s sovereignty. Looking ahead, Canada faces a crucial period of economic transition. Carney’s background in global finance suggests that his administration will prioritize fiscal stability, industrial investment, and strategic international partnerships. His government is expected to focus on mitigating the impact of Trump’s tariffs, strengthening domestic industries, and fostering new alliances abroad. The energy sector, in particular, will demand careful balancing, as Canada seeks to reconcile environmental commitments with economic growth. Carney’s leadership style is markedly different from Trudeau’s, more pragmatic, technocratic, and focused on economic fundamentals. While Canadians have expressed cautious optimism about his ability to steer the country through turbulent times, the road ahead is far from straightforward. The relationship with the U.S. remains delicate, and the global economic landscape is rapidly evolving. As I reflect on this transition, I am both intrigued and wary. Canada has entered a new chapter, one that will test its resilience, adaptability, and cohesion.

But these external pressures are only part of the challenge. Despite Canada’s global image as a model democracy, valued for its inclusivity, order, and breathtaking geography, internal tensions are straining the federation. What was once idealized as a cooperative union now increasingly resembles a collection of semi-autonomous provinces, each with divergent goals and grievances. Prime Minister Carney’s recent comment that Canada must function as one economy, not thirteen, reveals a growing concern: the idea of a singular Canadian identity is under strain. To grasp the gravity of the moment, one must understand Canada’s historical foundation and the long-standing tensions that have shaped its present fractures. Canada’s journey to independence was evolutionary rather than revolutionary. The 1867 British North America Act unified Ontario, Quebec, Nova Scotia, and New Brunswick into a confederation, not through shared identity, but as a strategic alliance. Over time, other provinces and territories joined, forming today’s federation of ten provinces and three territories. From the beginning, however, this was less a melting pot than a mosaic with cracks.

The roots of division trace back to the 18th century, when the British conquest of New France in 1763 left two distinct societies, English-speaking settlers in Upper Canada (modern-day Ontario) and French-speaking communities in Lower Canada (modern-day Quebec). These regions diverged in language, religion, legal systems, and culture. The 1837 to 1838 rebellions underscored these differences, and the British response, a political merger in 1841, only deepened the rift. Quebec’s French-speaking population feared assimilation, while English-speaking Canadians viewed Quebec’s insistence on autonomy as obstructionist. Even after Confederation granted Quebec a measure of autonomy, demands for cultural and political recognition persisted. Quebec nationalism evolved into a formidable political force, culminating in two referendums on sovereignty in 1980 and 1995, the latter failing by a razor-thin margin. While Quebec’s separatism is deeply rooted in language and culture, Alberta’s discontent is driven by economic grievances.

Alberta, rich in oil and natural gas, has long been a pillar of Canada’s economy. Yet many Albertans feel shortchanged by federal policies, especially those related to climate change and energy regulation. The cancellation of pipelines, carbon taxes, and perceived favoritism toward central Canada have fueled a sense of betrayal. Compounding this resentment is the federal equalization program, which redistributes wealth from richer to poorer provinces. Despite recent economic struggles, Alberta remains a net contributor, subsidizing a country that, many feel, neither respects nor supports its key industries. This frustration has birthed “Wexit,” a fringe but symbolically potent separatist movement that calls for Alberta’s independence or even union with the United States. While still marginal in electoral terms, Wexit taps into a broader current of Western alienation, shared by neighboring Saskatchewan. Many in the West see Ottawa as disconnected from their values and dismissive of their priorities.

Mark Carney’s rise to power comes at a pivotal moment. His call for a unified national economy is both pragmatic and aspirational. In a world of global shocks and belligerent trade partners, a fragmented domestic response weakens Canada’s leverage. Yet Carney’s vision faces stiff resistance. Provincial governments are protective of their jurisdiction, and many pursue agendas in open conflict with federal objectives. Quebec’s prioritization of its language and culture often leads to outright rejection of national initiatives. Alberta’s economic disenchantment has fostered political defiance. Even less vocal provinces are beginning to question whether Confederation truly serves their interests. In Alberta, the political divide is especially stark. Conservatives dominate provincial and federal elections, while the federal government has been under Liberal control for four consecutive terms, despite Alberta sending almost no Liberal MPs to Ottawa. This electoral disconnect has only deepened the province’s sense of political alienation.

The resulting crisis of cohesion raises urgent questions about Canada’s future. Can the federal government restore trust and cooperation among provinces? Or will rising regional discontent push the country toward constitutional reform, or worse, disintegration? The idea of Canada as a singular, united nation has always been more aspiration than certainty. Today, that aspiration is being tested like never before.

As provinces like Quebec and Alberta question their place in the federation, the rest of the country must confront an uncomfortable truth: Unity is not automatic. It must be earned, sustained, and continuously renegotiated. Without such effort, Canada risks becoming not one country, but thirteen.

The writer is a public health expert and development economist from Canada. He can be reached at: kindlejitu@gmail.com

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