Canada's Best Case Scenario
Countering Grey Zone Tactics to Achieve Strategic Symmetric Interdependence
A middle power’s greatest vulnerability is not its size, but its silence. We can choose the friction of sovereignty over the peace of a vassal state. A walk on part in a war or a lead role in a cage.
Summary
The best-case scenario is a Canada that is internally integrated and not absorbed by the US. It is a country that uses its Environment (critical minerals/energy) and Human Development (tech talent, education and peoples) as strategic shields and partners in building resilience. Canada remains an ally to the U.S. but it does so from a position of fiscal and technological strength, ensuring that future trade talks are a meeting of equals rather than a performance review of a subordinate.
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This scenario is the counter point to my diagnostic: the engineered vulnerabilities report published the day of Prime Minister Mark Carney’s Davos speech. It complements the recently released Designing Sovereignty study.
Using my CIFP methodology, I am able to develop a reasonable, but hypothetical, Best-Case Scenario for 2026 and three years onward. The goal is to determine how an effective counter grey zone strategy could be developed to inform and strengthen Canada’s position in advance of the CUSMA negotiations (the future of which is uncertain).
In essence, Canada achieves Strategic Symmetric Interdependence. A country that possesses the Authority to decide, the Legitimacy to lead, and the Capacity to act independently.
The projected outcome is what I call The “Strategic Pivot” through a Positive Feedback Loop in the face of US pressure. Instead of capitulating, Canada prepares.
Pressure: U.S. initiates a Grey Zone crisis (e.g., the 2025/26 tariff maelstrom, decertification, separatism support).
Response: Canada uses the crisis as a catalyst for “moon-shot” internal trade liberalization while simultaneously activating its global trade “off-ramps” in India, China, MENA, the EU and the Asia Pacific
Result: Strengthened domestic capacity and reduced critical dependencies on a single market.
Consequence: Canada negotiates with the U.S. from a position of strength, moving from a “security consumer” to a “strategic partner” with global alternatives.
This positive feedback loop contrasts with “integrationist” arguments recommended by “Defence Experts” who argue that Canada can manage a volatile US administration by making tactical concessions to avoid upsetting a transactional President, while “pricing in” his anger temporarily.
By focusing on National Resilience, this scenario is a challenge to traditional alliance assumptions based on cleaving closely to the US. While the “Old Guard” spent decades arguing that Canada could socialize the U.S. into being a benign partner through NATO and NORAD, I show that the opposite happened. Canada didn’t socialize Washington; Washington socialized Canada into a state of structural dependency.
A. Introduction
Background
This “Best Case” Scenario is state-centric. It focuses on building domestic strengths and shoring up vulnerabilities in response to US harm. Here I explain why this approach is preferable over a silo driven threat based approach. To that end, the CIFP ALC Framework used in the Vulnerabilities Report is integrated here with Six Structural Clusters, showing how Agents of Change (PMO, PCO, First Ministers, DIS Task Force) can neutralize U.S. Grey Zone tactics to achieve “Strategic Symmetric Interdependence.”
In the following, as proof of concept, I first explain how recent CPTTP-CETA trade talks can move Canada towards a best case outcome. I then clarify the transformative stages Canada should pass through as it moves towards greater autonomy. In the conclusion, I briefly consider how this framework is preferred over traditional alliance assumptions.
For those coming to this site without having first read my engineered vulnerabilities report, you can find it here.
That vulnerabilities report has effectively shifted the "Grey Zone" terminology from a purely military/espionage context into the realm of daily trade and diplomatic relations between the two neighbors.
There are three related sub stack reports summarising Canadian and global vulnerabilities and avoiding the worst case scenario.
A related report on lawfare with respect to Canadian innovation and research can be found here.
Background material including my co-authored research on grey zone conflict, and foreign policy in a multipolar world, that I used to inform this analysis can be found here. Several of these studies include warnings to government officials that the US was increasingly relying on “weaponised interdependence” and lawfare to secure gains at Canada’s expense.
The efforts of likeminded countries who face similar pressure from the US (such as Mexico and EU members) will be included in a separate scenario that examines the international dimensions of building collective resilience, such as the Third Path and Variable Geometry strategies. That analysis requires an evaluation of the impact of US grey zone tactics on other nations and the various connections they have with Canada.
Methodology
Here, the focus is on improving Canadian agency that moves Canada from a passive recipient of American policy to an active and engaged independent policy maker. The analysis tends towards effective domestic capacity building with legitimacy and authority strengthened as a result. This approach is “very Canadian” in the sense it places a heavy emphasis on POGG and assumes responsible, effective and accountable leadership across the board.
However, given the unpredictability of the Trump administration, I examine three (of many) possible wild card scenarios. The first depends on the success of the BOREALIS initiative (identified below). The second considers the question of Alberta secession. The third is the pending decision regarding the F35 purchase. I also have a separate entry and an op ed that addresses Carney’s failure to clarify Canada’s position on the US/Israeli bombing of Iran. You can find that here. I also talk about the inherent moral hazards of the US strategy here.
In a few months we will know more about all of these Wildcards, as well as whether CUSMA negotiations will proceed, at which point it will be necessary to revise the assessment one way or another.
The analysis is written as if the end users are the Canadian government and related primary stakeholders. The assumption is that these stakeholders have the capacity, motivation and support to put in place conditions necessary to achieve the best case outcome while at the same time are willing to take action to avoid the worst case (see separate post on sub stack). This emphasis on a specific “end user” is an approach I ask my students to take when they draft policy briefs and diagnostics for my courses such as here and here.
To be clear, efforts taken to achieve the best case scenario (or failing to do so), do not make the best (or worst) case scenario the most likely outcome.
For more accurate forecasting and tailored response strategies the framework is matched with key performance indicators, timelines and benchmarks for success. In addition this scenario is only as good as the inputs I have gathered together. Variations in stakeholder agendas, timelines, indicators and events analysis could produce a different scenario.
However to strengthen the findings of this assessment, in related posts I show why alternative strategies such as deeper integration are less likely to succeed. Triangulation using complementary methods such as expert interviews and events monitoring would further refine the assessment.
Rationale
The idea here is to generate ideas, engage those who are interested and inform policy as needed. As an open source assessment this report is designed to give some structure to the discussion, to encourage awareness and debate, and to help ensure the government understands that an effective strategy will require more than policy tweaks and clever messaging.
Whether we like it or not, the US correctly identifies that the battle for the 21st century is being fought in the ‘seams’ of our society. Our internal divisions are no longer just domestic issues—they are national security liabilities which we must address.
If Canada remains quiet, the U.S. can continue to erode sovereignty one “minor” policy change at a time. An open discussion can slow or even halt this incrementalism by drawing a “red line” in the public mind.
Canada is not the only middle power facing this problem. By being the first to “name the threat,” Canada can lead a coalition of allies (the “Principled and Pragmatic”) to collectively confront U.S. transactionalism, making it too expensive for Washington to bully them individually.
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B. CETA-CPTPP Trade Talks - Evidence that a Pivot is Possible
The recently announced decision by Mark Carney to lead on CETA/CPTPP trade talks is a clear signal of de-risking intent. It is a perfect example of how ALC vulnerabilities can be offset through a proactive strategy. For example:
Authority: By harmonizing standards with a broader bloc of allies (the EU and Pacific partners), Canada creates a "counter-weight" to U.S. regulatory gravity. When Canada aligns its data privacy, environmental, or labor standards with CETA/CPTPP rather than just USMCA, it asserts its Authority to follow global, multilateral norms rather than being structurally compelled by unilateral U.S. demands.
Legitimacy: Strengthening these agreements reinforces the legitimacy of Canada’s "Strategic Autonomy." It demonstrates to the Canadian public and businesses that the government is capable of securing market access and prosperity independent of Washington's whims. By providing "economic lifeboats" during U.S. trade volatility, the state proves it can protect the national interest, which bolsters its domestic standing.
Capacity: Joining these two frameworks together (often referred to as a “bridge” between the Atlantic and Pacific) expands Canada’s industrial capacity. It allows Canadian firms to scale in diverse markets, reducing the risk of “strategic abandonment” by the U.S.
Furthermore, recent 2026 efforts to coordinate Critical Mineral supply chains through both CETA and CPTPP ensure that Canada’s resources are developed with a diverse set of partners, preventing the U.S. from being the sole gatekeeper of Canadian industrial output. Here is a breakdown of expected impact:
C. Mapping Canadian Vulnerabilities Onto Cross Cutting Domains
A Structural Analysis identifies those areas where Canada to needs to focus. CIFP has six cross cutting data categories covering the full range of state performance. Here I highlight how Ambiguity, Incrementalism, and Hybrid Blending manifest in day-to-day bilateral relations, across these six domains, subtly eroding Canada’s Authority, Legitimacy, and Capacity (ALC).
1. Governance: The “Institutional Erosion”
Ambiguity (A): The U.S. issues broad, vague Executive Orders and “Entity Lists” regarding critical minerals or national security. By not explicitly naming Canada as exempt, it creates a “compliance chill” and “over-compliance” where Canadian firms and universities pre-emptively sever global ties to avoid potential U.S. wrath.
Incrementalism (I): The shift from permanent treaties to “Sunset Clause Diplomacy” (CUSMA 2026) places Canada on “permanent probation.” The “Zombie CUSMA” review forces lawmakers into a holding pattern, as incremental legislative threats like the Section 899 Retaliatory Tax “boil the frog” on sovereign tax policy.
Hybrid Blending (HB): Extraterritorial judicial pressure (e.g., the Meng Wanzhou case) and Proxy Lobbying by tech giants (Meta/Google) blend domestic law and corporate profit with high-level diplomacy. This hollowing out forces Canada to choose between its own legal sovereignty and its primary security relationship.
2. Economics: The “Capital Flight & Regulatory Gravity”
Ambiguity (A): The persistent use of Section 232 “Security” threats and IEEPA “Emergency” Tariffs (25–35%) creates a climate where any Canadian export could be labeled a threat. This instability suppresses long-term investment because businesses cannot guarantee future market access.
Incrementalism (I): The “IRA Gravity” and “Salami-Slicing” of the auto sector use massive, incremental subsidies and rules-of-origin tweaks to pull the supply chain south. Canada is forced to match subsidies dollar-for-dollar, effectively letting U.S. fiscal policy dictate the Canadian federal budget.
Hybrid Blending (HB): U.S. tech giants frame cultural acts (Bills C-11/C-18) as “trade barriers” via the USTR. Simultaneously, U.S. financial infrastructure coercion integrates KYC/AML requirements into U.S. foreign policy, forcing Canadian banks to act as enforcement agents for Washington. Similarly, the Pentagon’s aggressive moves to secure critical minerals create a complex tug-of-war for Canadian autonomy, shifting the relationship from a standard trade partnership to an integrated “defence industrial base.” There are growing concerns that Washington could use its financial leverage to push Canadian companies to redomicile their headquarters to the U.S., hollowing out Canada’s corporate mining sector.
3. Security & Crime: The “Technological & Tactical Tether”
Ambiguity (A): The U.S. creates Intelligence Tiering and makes “NATO 2% Conditional Support,” implying that Article 5 protection is “regional” or “proportional” to spending. This coerces Canadian fiscal and security policy without issuing a formal ultimatum. The 2026 US NDS explicitly identifies the Arctic and Greenland as "key terrain." The U.S. isn't just protecting allies; it is securing a "chokehold" on the North to ensure that allied Arctic policy can never diverge from U.S. strategic needs.
Incrementalism (I): The “NORAD Interoperability Trap” incrementally raises technical standards so high that only U.S.-made systems (F-35, specific AI) are compatible. This creates “Technical Debt,” hollowing out Canada’s domestic defence industry.
Hybrid Blending (HB): Programs like “Shiprider” and “Intelligence Fusion” blend jurisdictions and data platforms (CSIS/RCMP with U.S. Homeland Security). This “border thickening” allows U.S. surveillance logic to dictate which Canadian citizens are flagged as risks within their own borders.
4. Human Development: The “Talent & Data Dependency”
Ambiguity (A): Constant flux in TN-Visa interpretations and Medical Supply Chain “Favored Nation” status create extreme uncertainty. This triggers “pre-emptive migration” of doctors and engineers who move to the U.S. permanently to avoid being trapped by a sudden border shift.
Incrementalism (I): U.S. research grants (NSF/DARPA) incrementally add “Security Screens” for Canadian partners. Over time, this shifts the focus of Canadian academic inquiry toward U.S. military-industrial priorities rather than Canadian social needs.
Hybrid Blending (HB): The mass adoption of U.S.-owned “Sovereign Clouds” (AWS/Microsoft) and EdTech (Google Classroom) in public sectors blends Canadian service delivery with U.S. corporate infrastructure, making Canadian data vulnerable to U.S. legal seizures.
5. Demography: The “Social & Border Fluidity”
Ambiguity (A): The U.S. creates “Policy Voids” at the border by being vague about asylum enforcement (Safe Third Country Agreement gaps). This forces Canada to bear sudden demographic and financial costs, which the U.S. then uses as leverage in unrelated trade talks.
Incrementalism (I): Social media algorithms facilitate the “Culture War Export,” incrementally importing U.S.-centric grievances (e.g., First or Second Amendment rhetoric) into the Canadian context. This erodes the legitimacy of the Canadian “social contract.”
Hybrid Blending (HB): The use of U.S.-based “Dark Money” and “Grey MAGA” funding (via crypto/GiveSendGo) to support Canadian fringe movements or separatist advocacy blends foreign interference with domestic dissent, challenging federal legitimacy.
6. Environment: The “Resource & Green Protectionism”
Ambiguity (A): Federal ambiguity regarding the Line 5 pipeline and Great Lakes water diversion creates an “Ambiguity Trap.” By refusing a definitive treaty-based stand, Washington allows sub-national actors (like Michigan) to threaten Canadian energy and water security.
Incrementalism (I): “Green Protectionism” (IRA 2.0) and technical “Standards Salami-Slicing” incrementally favor U.S. industrial hubs. These “minor” technical changes avoid a national crisis while cumulatively degrading Canada’s capacity to manage its own resources.
Hybrid Blending (HB): The blending of environmental goals with trade protectionism—specifically “Climate-Linked” Tariffs and Carbon Border Adjustments (CBAM)—allows the U.S. to penalize Canadian products that don’t meet U.S.-defined standards, hollowing out Canada’s environmental autonomy.
D. Primary Stakeholders (Direct Action)
These actors hold the legislative, financial, and operational authority to implement structural sovereign reforms.
First Ministers (The “Unity” Core): The Prime Minister and provincial Premiers act as the ultimate agents for Legitimacy. Beyond removing interprovincial trade barriers ($210B buffer), they utilize the Federal-Provincial Working Group on Economic Reconciliation to prevent Alberta secession by granting specific regulatory autonomy over resource exports and making Western energy (LNG/Uranium) the centerpiece of new global trade deals. This group could utilise a sovereign health check list to determine if they are making progress:
Privy Council Office (PCO) A “New Class” of Technocrat joined up with the PMO as needed. Not a replacement for GAC and DND but a "Rapid Reaction” team. This change could be seen as reshaping the bureaucracy to favor those who are “economically literate” laser focused, and committed. This could include some of the wave of appointees (like the 15 senior civil servants reshuffled on March 4, 2026) who are focused on “agility” over established diplomatic protocol. The PCO must help Carney rapidly shift toward reducing structural asymmetry. This means aggressively diversifying trade—not by 10% or 15%, but by building the actual "hard infrastructure" (ports, pipelines, and digital corridors) that makes Canada physically capable of walking away from the U.S. market when necessary.
Global Affairs Canada (GAC) – Asia-Pacific & Emerging Markets: This branch acts as the agent for External Authority to facilitate Carney’s “Third Path.” It manages the 2026 Canada-China Trade Roadmap and the finalization of the India Comprehensive Economic Partnership Agreement (CEPA), securing non-U.S. “off-ramps” for Canadian commodities. GAC leads on the CETA-CPTPP file.
When engaging in trade talks with the U.S. Trade representatives this group should ask themselves three questions:
Strategic Ambiguity: Does the proposed agreement rely on vague terms that might limit Canada’s future freedom of action or allow for shifting expectations in bilateral agreements?
Incremental Commitments: Does the proposed agreement leave room for small, step-by-step policy alignments that gradually reduce Canada’s independent industrial capacity or long-term control over its domestic resources?
Integrated Pressures: Does the proposed agreement link military cooperation with economic or trade incentives, potentially narrowing Canada’s ability to make independent sovereign choices?
The BOREALIS Directorate: As a newly established independent agency, its leadership acts as a guardian of Authority. By funding “sovereign-first” technology sprints, they ensure Canada owns the “keys” to its own AI and quantum infrastructure, preventing technological tethering to any single foreign power.
Defence Industrial Strategy (DIS) Task Force: Composed of DND, ISED, and NRC officials, this group acts as the agent for Capacity. Their mandate is to shift procurement away from sole-source foreign dependency toward a robust domestic industrial base, integrating “dual-use” tech for global export.
Indigenous National Organizations: Groups representing First Nations, Inuit, and Métis are critical agents for Arctic Authority. Their leadership ensures northern sovereignty is culturally and operationally grounded in Canadian soil, leveraging traditional knowledge as a “Diversity Dividend” in international Arctic negotiations.
E. Secondary Stakeholders (Support & Influence)
These actors provide the technical, social, and economic foundation that makes sovereign resilience possible.
“Neo-Prime” Tech Startups & Diaspora Business Networks: These firms act as agents for Capacity. By leveraging Canadian Diaspora Networks, they use cultural and linguistic bridges to enter high-growth markets in India, China, SE Asia, Asia -Pacific, Africa and MENA, bypassing traditional U.S. distribution channels.
University Research Labs & IRCC: Academic institutions are the primary engines for Human Development. By partnering with DRDC and others on sensitive research and utilizing the Global Skills Strategy to recruit elite talent from India, China, MENA and Europe, they ensure high-skilled talent—and the resulting intellectual property—remains under Canadian jurisdiction.
The SITE Task Force: Composed of CSIS, CSE, GAC, and the RCMP, this group acts as a shield for Legitimacy. Their ongoing monitoring of foreign interference using my vulnerabilities framework as an entry point ensures that trade with China, India and the USA does not compromise democratic and societal integrity. This group will need to give a thorough rethink on how interference is conceptualised.
Canadian Financial Institutions & Investors in Canada: Banks and institutional investors act as secondary agents for Economic Sovereignty. By prioritizing “made-in-Canada” infrastructure and coordinating $70B in non-U.S. capital (e.g., from the UAE and Asia-Pacific sovereign wealth funds), they reduce binary fiscal dependency on U.S. markets.
To combat "Ambiguity" (a key tactic noted in the grey zone report), Business Leaders push for the re-establishment of SAGIT 2.0 (Sectoral Advisory Groups on International Trade). These would serve as a permanent "Sovereign Advisory System" to provide negotiators with real-time, text-ready technical advice to counter U.S. "salami-slicing" tactics
Civil Society/First Nations Networks can address resilience. The Council of Canadians and Pledge for Canada for example are focused on upholding international law consistently, investing in diplomacy and challenging threats to Canadian sovereignty. Following reports of U.S. officials meeting with Alberta separatist groups (which B.C. Premier David Eby called “near-treasonous”), First Nations Leadership has been vocal in opposing the Alberta separation movement, arguing that any move to leave Canada is unconstitutional and violates Treaty Rights.
Digital Rights and High Tech argue for a “Canadian Sovereign Cloud.” They contend that relying on U.S. tech infrastructure makes Canadian data—and by extension, Canadian autonomy—an “engineered vulnerability” that can be switched off or throttled during trade disputes. 70% of Canada’s most popular websites are hosted on US servers. Under Section 702 of FISA, this data is fair game for U.S. intelligence. Potential partners here might include The Council of Canadian Innovators who are advocating for a “National Resilience Shield” to secure Homegrown Innovation, Economic Leadership, and Defence.
Oragnised Labour can contribute to national resilience by strengthening supply chains, advocating for economic sovereignty, enhancing social stability, and providing workplace vigilance. Unions are involved in Workforce Alliances across key sectors like transportation, energy, and mining to identify skills gaps and secure talent pipelines.
Canadian Extractive Industries The Pentagon heavily supports and funds critical deals, particularly regarding mineral projects and strategic technologies, to secure the U.S. industrial base and defence supply chain. Since 2023, the Department of Defense (DoD) has funded or shown interest in over 20 mining initiatives in the U.S. and Canada. The Pentagon’s Defense Advanced Research Projects Agency (DARPA) created an AI program, OPEN (Open Price Exploration for National Security), to establish reference prices for minerals like gallium, germanium, antimony, and tungsten.
F. Building a Response Strategy
Canada’s 2025–2028 trajectory indicates a proactive effort to stabilize and improve its Authority, Legitimacy, and Capacity (ALC) by balancing internal hardening with “Pragmatic Multi-Alignment.”
1. Examples of Improvement by ALC Component
Authority (A): Canada has asserted independent decision-making by maintaining strategic tariffs while simultaneously negotiating the 2026 China-Canada Trade Reset. This deal restored market access for Canadian canola and beef in exchange for a quota-based entry for Chinese EVs, proving Canada can navigate complex trade-offs independently. It initiates the process for a larger strategic partnership.
Legitimacy (L): Stabilized by the 2025 appointment of PM Mark Carney. Legitimacy is further bolstered by the “Grand Bargain” with Alberta, which traded federal regulatory concessions for a unified front in the CUSMA 2026 review, with the goal of neutralizing secessionist momentum (see wildcard below).
Capacity (C): Canada has committed to massive CAF reinvestment via Our North, Strong and Free. Furthermore, the $2B EDC trade finance envelope empowers Canadian exporters to penetrate the Indian energy and tech markets. Carney has countered U.S. "Grey Zone" pressure by framing new high-speed rail (Toronto-Quebec City) and Arctic infrastructure as essential tools to prevent internal regional alienation that the U.S. could exploit.
G. Measuring Improvement Across CIFP Domains (Examples)
H. Building a Resilience Roadmap (2025–2026)
Phase 1: Internal Hardening & Global Foundation (Now)
The “National Prosperity Treaty”: Provinces agree to eliminate 75% of internal trade barriers.
GAC Alliance Activation: Initial negotiations with the UAE and Qatar for FIPA agreements to diversify capital sources. Canada and Germany sign a joint declaration of intent and launch a Sovereign Technology Alliance. This initiative focuses on expanding AI research and addressing skill gaps.
Phase 2: Strategic Decoupling & Diaspora Mobilization (January 2026 – April 2026)
Procurement Pivot: The DIS Task Force moves to cancel sole-source U.S. contracts in favor of domestic ventures.
The Diaspora Bridge: IRCC expands its mandate to explicitly use diaspora networks to facilitate market entry for Canadian firms in the Asia-Pacific region and MENA.
Mining: The Investment Canada Act subject foreign state investments—including from the U.S.—to case-by-case national security reviews. Canada launched its own $3.8-billion Critical Minerals Strategy and the Defence Industrial Strategy to ensure it remains a “global supplier of choice” rather than just a subsidiary of the Pentagon. Canada is now using its own DPA to stockpile minerals domestically, ensuring Canadian production is prioritized for Canadian and general "trusted partner" defence needs before foreign
Phase 3: The Pre-Negotiation “Pivot” (March 2026 – June 2026)
The India/China “Reset”: PM Carney visits India to sign the 10-year uranium deal and formalizes the India-Canada CEPA. Simultaneously, the China canola tariff reduction takes effect. CETA-CPTPP Talks Proceed Apace.
Arctic Presence Surge: Indigenous Leaders and the CAF launch a joint “Northern Shield” exercise, inviting allied European observers to demonstrate international cooperation.
I. The “Sovereignty Dividend” 2026 and Beyond
By June 2026, Canada’s ALC levels are generational high. When the CUSMA review begins, the U.S. is met with a Canada that has a $210B domestic buffer, $300B in new non-U.S. trade pipelines, and a unified federation. Canada has moved from a “Policy Taker” to a “Policy Maker,” possessing the independent technology and global alliances necessary to secure its sovereign future.
J. Wild Card Scenarios
Wild Card - BOREALIS Takes Off
BOREALIS (the Bureau of Research, Engineering and Advanced Leadership in Innovation and Science) and its related initiatives are the cornerstone of the Authority and Capacity components. They are primarily included as the mechanism for securing “technological sovereignty” and driving the Defence Industrial Strategy (DIS).
Here is how BOREALIS and its associated components are specifically integrated:
Stakeholder Roles
B. Primary Stakeholders (Direct Action): The BOREALIS Directorate is listed as the primary “guardian of Authority”. It is a newly established independent bureau housed within Defence Research and Development Canada (DRDC). Its mandate is to fund “sovereign-first” technology sprints in areas like AI, quantum computing, and cybersecurity.
C. Secondary Stakeholders (Support & Influence): University research labs and “Neo-Prime” start-ups are linked to BOREALIS through the newly announced Maritime Defence Innovation Hub (Maritime DISH) and other secure “hubs” designed to transition prototypes from labs to deployment.
Strategic Improvements (ALC Components)
Authority (A): The framework highlights the 2025 “moon-shot” proposal, where BOREALIS establishes a DARPA-style deep-tech endowment. This aims to reduce critical dependencies on foreign technological platforms by ensuring Canada owns the intellectual property for its own essential infrastructure.
Capacity (C): BOREALIS acts as the “brain” behind the $6.6 billion Defence Industrial Strategy. It aligns over 130 federal innovation programs toward mission-driven security goals, such as Arctic surveillance and uncrewed autonomous systems.
Resilience Roadmap (Hypothetical Milestones)
Phase 1 (The Launch): The roadmap includes the BOREALIS Launch, where the directorate awards the first $500M in “Sovereign Tech Sprints” to Canadian startups. This establishes Canadian authority over AI and quantum validation before international standards become mandatory.
Phase 2 (Sovereign Infrastructure): The framework concludes with the Sovereign Cloud Migration, ensuring that DND and CRA data are moved to Canadian-owned infrastructure, a process supported by the Sovereign AI data centres championed by BOREALIS-related mandates.
2.Wild Card - Alberta Secession - The “Unity Reset” Scenario (2025–2026) Hypothetical
a. The Federal-Provincial “Grand Bargain”
In late 2025, the Carney government and Premier Smith signed a transformational Memorandum of Understanding (MOU) that fundamentally altered the federal-provincial dynamic.
Regulatory Autonomy: Ottawa agreed to suspend the Clean Electricity Regulations and not implement the oil and gas emissions cap in Alberta.
Impact Assessment Reform: A new agreement, due by April 1, 2026, aims to reduce duplication by moving to a single assessment process that respects provincial jurisdiction.
Fast-Track Approvals: The federal and provincial governments are working to streamline regulatory processes to achieve a maximum 2-year approval timeline for major projects.
b. Western Energy as a Global Asset
The federal government has pivoted to treat Alberta’s resources not as a climate liability, but as a national strategic asset used to build new non-U.S. alliances.
The Asian Gateway: The MOU includes a commitment to advance a new bitumen pipeline to Asian markets, designated as a priority project of national interest under the Building Canada Act.
Energy Superpower Deals: Alberta’s energy is the primary lever in new trade pacts, such as the 10-year, $2.8B uranium deal with India and re-established canola and beef access to China.
Northern & East-West Corridors: Budget 2025 proposed $213.8M for the Major Projects Office to support “guaranteed economic corridors,” ensuring Alberta can reach the Pacific, Arctic, and Atlantic coasts without provincial or federal blockage.
c. The “Diversity Dividend” & Indigenous Co-Ownership
Secessionist sentiment is further checked by a new model of Economic Reconciliation that makes separation legally and socially nearly impossible.
Indigenous Partnership: The new pipeline and the Pathways Alliance CCUS project are designed for Indigenous co-ownership, supported by the Alberta Indigenous Opportunities Corporation (AIOC) and the federal Canada Indigenous Loan Guarantee Corporation.
Treaty Obligations: Indigenous nations in Alberta have unified in opposition to separation, arguing it would fundamentally undermine their treaty rights, creating a massive legal barrier to any secession attempt.
e. Results: Economic Resilience vs. Secession Risk
The “sovereignty within a united Canada” approach has proved more popular than outright independence.
The Cost of Leaving: Economic analysis has highlighted that secession would shrink Alberta’s economy by $20B to $30B due to new non-tariff barriers.
Internal Trade Gains: Alberta’s leadership in removing interprovincial trade barriers (estimated to provide a $210B long-term GDP gain nationally) has replaced the “victim narrative” with one of national leadership.
Public Sentiment: While separatist groups continue to collect signatures, polling shows that the vast majority of Albertans prefer the “Grand Bargain” of economic autonomy over the high-risk gamble of becoming a landlocked state.
By June 2026, Alberta’s role as the engine of Canada’s “Asia-Pacific Pivot” has effectively turned the threat of secession into a powerful bargaining chip that secured the province the very autonomy it sought—without the economic suicide of leaving the federation.
3. Wild Card - the F35- Gripen Trade off
a. US Response
Washington is currently using ambiguity and military pressure to force Ottawa into total alignment. The fallout would likely manifest in three escalating stages. These represent a transition from an “allied” relationship to one where the U.S. actively manages Canada as a security risk rather than a partner.
Aero-Sovereignty: Following Canada’s review of the F-35 deal, U.S. Ambassador Pete Hoekstra warned that the U.S. will purchase its own jets to “fill the gaps” and fly patrols into Canadian airspace, effectively demoting the RCAF to a secondary force.
Institutional Isolation: The U.S. has threatened to “alter” NORAD, potentially cutting Canada off from high-tier intelligence (the “Golden Dome” shield) and refusing to integrate non-U.S. jets (like the Gripen) into the North American network.
Economic Coercion: President Trump has already moved to decertify Bombardier aircraft and threatened 50% tariffs on all Canadian aerospace parts as a “penalty” for seeking military independence.
b. The Canadian “Offset” Strategy
If Canada chooses to ignore the recent warnings from U.S. Ambassador Pete Hoekstra—specifically regarding the “pause” or reduction of the F-35 order in favor of a mixed fleet like the Swedish Gripen, the Carney government response is to move from “Passive Integration” to a more defensive, resilient posture.
A “Sovereign Capacity" agenda specifically designed to blunt the U.S. "Grey Zone" tactics will be developed involving Defence Bonds, Sovereignty Tax Incentives and Carbon Border Adjustments (CBAs).
The Mixed-Fleet Pivot: Canada is leaning toward a “Sovereign Tier” of defence, keeping less than original commitment of F-35s to appease NORAD while moving to the Saab Gripen, which can be built and maintained domestically without a U.S. “software umbilical cord.”
Hardening the State: The 2026 budget focuses on “Institutional Hardening,” including a Canadian-owned data cloud and a review of embedded U.S. officials in Canadian intelligence to prevent “digital annexation.” This could ensure Canada is “delinked” from the US tether in the event of unauthorised US incursions into Canadian airspace.
K. Summary of Findings and Next Steps
Canada is no longer just defending against so called adversaries like China; it is now actively trying to de-risk its relationship with an unstable and interventionist United States. Canada is finally realizing that “Capacity” without “Authority” is just another word for dependency. Agency is the order of the day.
Contrast this conclusion with that of traditional alliance driven arguments
If you view Mark Carney as a leader looking for a “credible exit” from the hyper-dependency of the past decade, my work serves as the intellectual scaffolding for that pivot. It provides the “meat” by reframing Canadian weakness not as an accident, but as a structural design flaw that requires a sovereignty-first overhaul.
1. Justifying “Strategic Decoupling”
Carney has often spoken about economic resilience. My focus gives this a security edge by arguing that integration into U.S. tech and IP frameworks is an engineered vulnerability. This allows a leader to move away from U.S. standards not out of “anti-Americanism,” but as a matter of national survival.
2. Redefining Foreign Interference
By arguing that “friendly influence” can be as hollowed-out as “hostile interference,” my research gives a prime minister the cover to push back against U.S. political pressure (e.g., on trade or energy) using the same high-stakes language usually reserved for adversaries like Russia and China. It makes “No” a security requirement rather than a diplomatic snub.
3. Intellectual “Cover” for a New Elite
My research is a signal to the Ottawa bureaucracy that the old “Realist” schools of thought must provide a new map. It moves the conversation from “How do we please Washington?” to “How do we stress-test our dependencies?” This is the exact kind of policy heavy transition Carney would need to justify a shift in NATO spending or trade diversification.
4. Domestic Legitimacy
I argue that the hollowing out of Canadian institutions leads to a loss of state legitimacy. For a leader trying to “fix” Canada’s fractured political landscape, my research offers a structural framing.
My research doesn’t just complain; it provides a data friendly justification to stop treating Canadian autonomy as a secondary concern to the “Special Relationship.” It turns a vague desire for independence into a strategic necessity.
Next Steps
My contribution isn’t that I discovered secret files in a basement; it’s that I applied a “Fragile State” lens—usually reserved for developing nations or war zones—to a G7 sovereign power like Canada. This “analytical flip” is what ended the informational asymmetry. Mainstream Canadian political science often uses the term “Interdependence.” Like Carney’s Davos speech my framework rejects this as a “polite fiction.” By mapping the specific nodes where Canada cannot function without U.S. permission (from satellite data to dairy software), I reclassify the relationship as a managed dependency.
If you see no merit in the idea of building national resilience, believe that it is impossible to break free from the status quo approach based on bureaucratic silos or prefer that academics keep their crazy ideas locked away in an ivory tower that’s fine.
Keep in mind critics are now forced to distinguish between "friendly influence" and "hostile interference"—a distinction that this study and my engineered vulnerabilities paper argue is increasingly irrelevant if the result (weakened Canadian state legitimacy, capacity and authority) is the same or worse.
The question I have for you is how well does YOUR policy agenda protect Canada if the U.S. continues to prioritize its own interests, security and economic future over those of its allies? The EU is coming to terms with this problem.
Policy can only improve through well founded coherent and structural change. That is what Carney meant when he talked about the great rupture. For far too long Canada’s leaders have relied on rhetoric not only as proof of their right to lead but that they were actually making a difference. Now is the time for evidence-based policy making.
In stating that "nostalgia is not a strategy" Mark Carney gave a public "eviction notice" to the continentalists. If the rules don't exist and the US is "monetizing its relationships" the Old Guard’s strategy of "quiet diplomacy" is what Carney calls "performing the rituals."
If Canada keeps prioritizing "stability" over "sovereignty," we will reach a point where the Canadian government exists only to manage the local delivery of U.S. policy.
Note: The CIFP website describes the methodology for conducting detailed events monitoring and data driven analysis drawing from the CIFP dataset comprised of more than 90 statistical indicators with coverage for 190 countries over a 30 year span. That methodology, far more rigorous than the one applied here, is described in various publications (articles and books).
About The Author
David Carment holds a PhD from McGill University . His thesis, supervised by Michael Brecher, examined the international dimensions of ethnic conflict (published as Who Intervenes? Ethnic Conflict and Interstate Crises). His doctoral work was funded in part by SSHRC, DND, Barton and FCAR. Part of his dissertation field work took him to SE Asia where he held a Visiting Scholarship at the Institute for South East Asian Studies.
After graduating from McGill, Carment held a postdoctoral fellowship at the Hoover Institution, Stanford University and taught briefly at the International University of Japan. Early in his career he held a NATO Fellowship focusing on ethnic conflict in the post Cold War era and a Cadieux Fellowship at GAC focusing on early warning tools, risk assessment and conflict prevention.
More recently Carment has held Fellowships at the Belfer Center, Harvard University, the Center for Global Cooperation in Duisburg Germany and WIDER-UNU in Helsinki, Finland.
Carment has worked with CFEC, the EU, the UNDP, DRDC/DND, and GAC in the development and operationalisation of early warning and risk analysis tools.
Carment is currently a Fellow of the Canadian Global Affairs Institute and the Institute for Peace and Diplomacy. He has led the Country Indicators for Policy project (www.carleton.ca/cifp) a risk assessment and forecasting tool focused on diaspora, fragile states and grey zone conflict.
Carment's field research, teaching and training have given him the opportunity to work with NGOs, students and policy makers in the Balkans, West and East Africa, Crimea, SE Asia and Central Asia.
He is the founding Series Editor of Canada and International Affairs and served as Editor of Canadian Foreign Policy Journal for 14 years. He has published more than 60 articles and 20 books on topics ranging from fragile states and aid effectiveness to mediation, diaspora, grey zone conflict and Canadian Foreign Policy. His most recent books include Democracy and Foreign Policy in an Era of Uncertainty and The Handbook of Fragile States.
AI tools were used to gather and organise information. I don’t doubt the Canadian government is doing likewise using sophisticated AI forecasting tools.