Don Stewart is the former Conservative Member of Parliament for Toronto—St. Paul’s.Canada did not choose its geography. However, it is our competitive advantage, and it cannot be overlooked, understated, taken for granted, or copied. We, as Canadians, face a fundamental question amidst rising global uncertainty and economic nationalism: how should we position ourselves relative to our most important economic partner, the United States (US)?We should begin with realism. Or to use the words of another Canadian, we should take the world as it is, not as we wish it to be. Canada shares the world’s longest undefended border with the US, and that proximity has shaped one of the most deeply integrated economic relationships in the history of the world. Supply chains across industries like automotive, energy, agriculture, and others are not simply connected, they are intertwined. A single automotive product can cross the border multiple times before it is finished. Agreements like CUSMA formalize what geography and economics have already made inevitable.In this context, policies and rhetoric that unnecessarily aggravate the Canada-US relationship risk undermining our own economic interests. The US is not just another trading partner. The US is Canada’s largest customer, a critical source of investment, and a key driver of scale for Canadian firms. Stability and alignment create opportunity. Friction creates uncertainty and chokes capital flows.There is also a strategic risk which tends to be ignored. If Canadian firms lose ground in the US market, whether due to policy friction or reduced alignment, those gaps will not remain empty. Competitors from the US or other countries will step in to fill them. Market share, once lost, is difficult to regain. As Bruce Springsteen said, “These jobs are going, boys, and they ain’t coming back to your hometown.” Not for a long time, if at all. In that sense, distancing ourselves from the US does not simply reduce dependence, it actively displaces Canadian businesses in favour of foreign competitors..The same logic applies to capital and industrial strategy. Canadian companies benefit from deep access to US capital markets, where scale, liquidity, and investor depth are unmatched. Just as importantly, Canada has historically been a major destination for US investment, but that advantage is increasingly constrained by regulatory uncertainty and project delays that deter capital inflows. Greater alignment and predictability would not only lower the cost of capital for Canadian firms but also unlock significant inbound investment that is currently sitting on the sidelines. Meanwhile, closer alignment on industrial policy, particularly in areas like critical minerals, batteries, and electric vehicles, would ensure Canada is embedded in next-generation supply chains rather than competing from the sidelines.There is also a compelling case for greater regulatory cooperation. Harmonizing standards where it makes sense, in critical minerals and emerging technologies, for example, can reduce costs, attract investment, and strengthen North America’s global competitiveness. This is not about surrendering sovereignty, it is about exercising it pragmatically.Canada and the US benefit from shared language, similar legal and financial systems, and decades of institutional cooperation, including successful partnerships like NORAD. These advantages are unavailable to other countries, and they should be leveraged, not taken for granted.Still, none of this suggests Canada should stand still globally. Diversifying trade through agreements like CETA and the CPTPP is both prudent and necessary. Expanding access to Europe and the Indo-Pacific reduces risk and creates new opportunities for Canadian businesses. These agreements have already been around for several years but need to be nurtured and explored with renewed vigour.Diversification should, however, be approached with strategic discipline. Leaning too heavily into markets like China carries its own risks, including political unpredictability, regulatory opacity, and a track record of economic coercion in disputes with Western countries. China is a known human rights violator, and we must be clear-eyed about this and not attempt to alter the narrative. Expanding global trade is important, but it should not come at the expense of stability, trust, and aligned economic values..None of this is to ignore real tensions, as US tariffs and protectionist measures have created major challenges for Canadian industries. But the response should be strategic. Canada’s opportunity lies in deepening engagement with US businesses, state leaders, and industry groups. We must make the case to our American friends that Canadian inputs, energy, and supply chains support their competitiveness.By demonstrating our value within the US economy, Canada can help build internal support for policies that treat us as a partner rather than an adversary. We are both stronger when we work together. In the end, diversification should be understood as a complement to our US relationship, not a replacement. While we are auditioning for new friends, in the fullness of time, our southern neighbour will continue to occupy a special place in our national story and economy. To be clear, a strong North American foundation has often allowed Canadian firms to scale and compete more effectively on the global stage. No other market offers the same combination of scale, proximity, and integration.Canada’s trade policy thrust should not be about choosing between the US and the rest of the world. It should be about recognizing where our greatest advantages lie and building outward from there. At a time when neighbourliness seems to be waning, let’s pay more attention to our friend next door.Don Stewart is the former Conservative Member of Parliament for Toronto—St. Paul’s. He spent over 20 years working on Bay Street and served as Honorary Lieutenant-Colonel in the Canadian Armed Forces. Don holds both engineering and MBA degrees from Queen’s University and is a CFA Charterholder.
