TORONTO — Prime Minister Mark Carney used a keynote address at the World Economic Forum in Davos to deliver one of the clearest statements yet from a G7 leader that the post-Cold War global order has fundamentally broken down.Carney argued that countries must stop pretending old rules still apply and instead build new forms of power, resilience and cooperation.Speaking to political and business leaders, Carney rejected the idea that the world is undergoing a temporary transition, saying instead that it is experiencing a “rupture.” The long-standing rules-based international order, he said, no longer functions as advertised, as economic integration is increasingly used as a tool of coercion rather than cooperation.Carney framed his argument around a parable from Czech dissident and former president Václav Havel, who described how authoritarian systems endure when ordinary people comply with rituals they know to be false. For Carney, the modern equivalent is countries continuing to invoke the language of rules-based globalization despite growing evidence that power, not rules, now determines outcomes..“It is time for companies and countries to take their signs down,” Carney said, urging governments to acknowledge that trade rules are enforced unevenly, international law is applied selectively, and major powers increasingly exempt themselves from constraints.For decades, Canada and other middle powers prospered under U.S.-led global institutions, Carney acknowledged, benefiting from open trade, secure sea lanes and financial stability. But he argued that bargain no longer holds, as tariffs, supply chains and financial systems are now routinely weaponized.Rather than calling for a retreat into isolation, Carney outlined what he described as “value-based realism,” a strategy that combines commitment to core principles such as sovereignty and territorial integrity with pragmatic engagement in a fragmented world. The approach, he said, accepts that not all partners share Canada’s values, but that disengagement would weaken rather than strengthen national resilience..A central theme of the speech was the vulnerability of middle powers, which lack the scale to dictate terms unilaterally. Carney warned that when such countries negotiate only bilaterally with major powers, they do so from weakness, competing with one another for favor while mistaking accommodation for sovereignty.“If we’re not at the table, we’re on the menu,” he said, calling for middle powers to act collectively to create alternatives to a world divided between rival hegemons.Carney outlined a series of policy shifts already underway in Canada. Domestically, he pointed to tax reductions, the removal of federal barriers to interprovincial trade, and plans to fast-track roughly $1 trillion in investment across energy, artificial intelligence, critical minerals and trade corridors. He also reiterated plans to double defense spending by the end of the decade, with an emphasis on strengthening domestic industrial capacity.Internationally, Carney said Canada is diversifying its economic and security relationships at an accelerated pace. He highlighted a comprehensive strategic partnership with the European Union, participation in European defense procurement, and more than a dozen new trade and security agreements signed in recent months.Notably, Carney defended Canada’s decision to deepen engagement with China, describing a new strategic partnership as additive rather than dependent. While acknowledging the need for “clear guardrails,” he said disengaging from the world’s second-largest economy would weaken Canada’s position rather than strengthen it. The comments run counter to recent U.S. efforts to encourage allies to decouple or de-risk from China.Carney also emphasized Canada’s opposition to tariffs linked to Greenland and voiced strong support for Danish and Greenlandic sovereignty, a position that drew applause from the Davos audience. He framed Arctic security as a defining test for NATO, outlining investments in radar, submarines, aircraft and permanent presence in the region.While condemning Russia’s actions in Ukraine and describing Moscow as a real threat in the Arctic, Carney said the goal of Canada’s military buildup is deterrence, aimed at preventing escalation rather than provoking it.On global governance, Carney argued traditional multilateral institutions such as the World Trade Organization and United Nations are increasingly unable to manage modern crises. In their place, he proposed “variable geometry” coalitions, where groups of countries cooperate issue by issue based on shared interests, whether on Ukraine, trade, critical minerals or artificial intelligence.As part of that approach, Canada is championing efforts to bridge existing trade blocs, including linking the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with the European Union, creating a potential trading network spanning 1.5 billion people.Carney also addressed the Israel–Gaza conflict during a question-and-answer session, confirming Canada has been invited to participate in a proposed international “board of peace.” He said Ottawa supports efforts to stabilize Gaza but emphasized the need for immediate humanitarian access and progress toward a two-state solution.In closing, Carney rejected what he described as nostalgia for the post-1990s era of globalization. “The old order is not coming back,” he said, arguing that countries must build strength at home and cooperate honestly abroad rather than waiting for stability to return.For Canada, Carney said, the path forward lies in recognizing reality, reducing vulnerability to pressure, and working with like-minded partners to construct a new, if imperfect, framework for global cooperation.
