Robert G. Finbow, Dalhousie University.
March 24, 2025
The idea of Canada joining the European Union is suddenly in vogue. Publications from the Economist to the Telegraph have raised this possibility and touted benefits for the preservation of democratic values as well as commercial and economic connections. Frédéric Mérand has provided a nuanced and thoughtful piece in Policy Options, suggesting the potential and limits of such a move. Closer connections to Europe seem essential to preserve a partnership based on democracy and multilateralism. EU membership could “act as a hedge for our economic security while keeping our political sovereignty”. An application for EU membership might be a useful diplomatic feint to indicate Canada’s seriousness in detaching from the increasingly unreliable American partnership. Even if full accession to the EU and its acquis communautaire is unlikely, the Comprehensive Economic and Trade Agreement (CETA) and the Strategic Partnership Agreement (SPA) provide a strong basis for developing and deepening transatlantic connections. As the stalled ratification of CETA suggests, it would be difficult to secure member state approval for Canada’s actual accession to the union. Yet the Trumpian demolition of the liberal trading order may at least boost EU support for full ratification of CETA with a reliable transatlantic trade partner.
Faced with Trump‘s erratic threats, increased collaboration is underway on several fronts. There are enhanced discussions on defense and security, co-production of military equipment and so forth. CETA has increased commercial connections and supply linkages in some sectors, though its use has fallen short of potential. The EU via CETA could become a replacement supplier of goods or services normally purchased from the US but whose costs might be distorted by tariffs. Canada could play a similar role for the EU. Mérand asks if Canada could consider deeper connections with Europe, modelled on Swiss participation in the internal market and Schengen area, or if Canada could approximate Norway’s participation the European Economic Area. Deepening of the CETA and SPA are more likely to be the practical route forward. However, high-profile talks with the EU could send a signal that Canada would finally pursue a “third option.” This approach, championed by Pierre Trudeau, was abandoned after North American free trade in the 1980s. As fair trade critics warned, this increased economic dependence on the American hegemon, which left Canada extremely vulnerable to Trump’s threats.
Two potential obstacles to long-term collaboration warrant attention. First, both partners in the CETA partnership have emphasized environmental sustainability and action against climate change. This includes commitments to improved green standards in the products exchanged between the two. The current Canadian election pits parties which share this commitment to climate sensitive policy against the official opposition, backed by vocal and virulent support from fossil fuel producing provinces. Therefore, the deepening of the relationship with the EU could become problematic if the CPC does form a majority or minority government, potentially upending many of Canada’s environmental policies and climate commitments. In fact, given Alberta’s threats of a “national unity” crisis if Ottawa does not remove environmental constraints from the fossil fuel sector, any future Canadian government may have difficulty following through on the sustainability commitments. New Prime Minister Mark Carney’s elimination of the retail carbon tax and discussion of accelerated pipeline construction indicates this dilemma. If Carney, or a Conservative PM, act to remove emissions caps or other climate measures, Canada could run afoul of the EU’s Carbon Border Adjustment Mechanism and the relationship could decrease. However, the EU might welcome improved infrastructure to export liquid natural gas or other fuels to Europe, to wean member states off unreliable Russian supplies.
Second, in response to Trump’s manufactured crisis, the go-to instinct of political leaders in both Canada and the EU is to double down on liberalization, interprovincially and transnationally. Leaders believe this will increase efficiency and competitiveness, allowing their economies to better deal with withdrawal from dependence on US supply chains and consumers. However, as with neo-liberal policies over the past half century, these entail risk, driving inequality between winners and losers which has been fuel for the populists’ call for economic sovereigntism and protectionism. Studies of electoral behaviour on both sides of the Atlantic show an upsurge in right-populist nationalism in districts which fare poorly in liberalized, integrated economies. Additionally, the core middle class basis of democracy in civil society is under stress, as new generations lose access to the lifestyle of home ownership and consumption which underpinned the post-war democratic order. Political scientists agree on the importance of the middle class to the health of democracy. Pursuing further liberalization without addressing declining economic security for the majority risks leaving new generations susceptible to nationalist, protectionist, even xenophobic rhetoric. This is already evident in some EU member states, where insecure communities help drive populist resistance to CETA ratification. And it is evident in Canada, where real or perceived class and regional inequities provide a basis for Maple MAGA, nurtured by transnational networks and online misinformation.
While the crisis requires short-term responses, the challenge posed by populism and protectionism will not be quickly or easily addressed. If Trump succeeds in demolishing the embedded liberal order, it cannot simply be replaced by redoubled liberalization without concern for unequal impacts. Billionaires desirous of weakening regulatory nation states, aided by myriad channels of misinformation, could continue to boost populist nationalism and protectionism. Canada will not be immune, as divisive Trumpist premiers and 51st state supporters will persist and grow in strength over time. And many corporate leaders will prefer the easy route of capitulation and further integration with the US markets. CETA benefits need to be spread across Canada’s regions to prevent erosion of support in areas which benefit less (as in Western Canada among meat producers for instance). The benefits of transatlantic partnership need to be more broadly distributed and carefully explained to impacted groups lest those displaced by competition and efficiencies turn completely against internationalism and multilateralism as many have in the US.
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