Carney Is Building a Bridge Across the Atlantic as Canada and Europe Launch an Alliance for the Future

Canada is looking across the Atlantic, and this time the objective goes beyond the improvement of trade relations

By Yiannis Damellos and Mars Strangelove Jr.

On October 30, Prime Minister Mark Carney hosted European Commission President Ursula von der Leyen and European Council President António Costa in Montréal for the 21st Canada-European Union Summit. The result was the launch of what the two sides call the Alliance for the Future, an ambitious attempt to bring Canada and Europe closer together economically, technologically and strategically.

The announcement comes at a time when the traditional assumptions underlying international trade and security are being challenged. Supply chains have become instruments of geopolitical influence, access to energy and critical minerals is increasingly strategic, and technological dependence can create vulnerabilities that extend well beyond commercial relationships.

For Canada, the implications are particularly important. The United States remains its largest trading partner and its closest continental economic relationship. But the changing political and economic environment in Washington has made diversification an increasingly urgent national priority. Carney's approach is to build alternatives without abandoning existing relationships, and Europe is an obvious partner.

Beyond trade: Building economic security

The new alliance is designed to cover several areas that governments increasingly regard as essential to national sovereignty. Critical minerals are among the most important. Canada possesses significant deposits of resources required for batteries, electric vehicles, advanced manufacturing, defence technologies and the broader energy transition. Europe, meanwhile, is seeking to reduce its dependence on concentrated sources of supply, particularly in strategically sensitive industries. Canada and the European Investment Bank have concluded negotiations on an agreement intended to facilitate European investment in Canadian critical-minerals projects.

The two sides also plan to develop mechanisms for investment, stockpiling and more secure supply chains. The objective is not simply to extract and export raw materials. The longer-term ambition is to strengthen the entire value chain, including processing, refining, manufacturing and recycling. Carney knows that countries which export raw materials without developing processing and manufacturing capacity often surrender much of the economic value to other markets. He wants Canada to have a larger share of that value.

The technological dimension is deep

The agreement also extends into artificial intelligence, semiconductors, quantum technologies, advanced computing and digital infrastructure. Canada and the EU have concluded substantive negotiations on a Digital Trade Agreement that will complement the existing Comprehensive Economic and Trade Agreement, or CETA. They have also agreed to deepen cooperation in AI research, security and governance, while expanding access to advanced computing infrastructure.

Canada's participation in the European High Performance Computing Joint Undertaking is another important development. It creates opportunities for closer connections between Canadian and European supercomputing resources and research communities. 

The two sides are also working towards new subsea cable infrastructure connecting Canada, Europe and Asia. That initiative deserves particular attention. Digital communications infrastructure is increasingly a matter of national security. Dependence on a limited number of routes, operators or jurisdictions can create vulnerabilities during political disputes, cyberattacks or international emergencies. A more diversified transatlantic communications network would strengthen Canada's ability to maintain secure connections with European partners.

Energy: An opportunity, not yet a deal

Energy security is another central pillar of the alliance. Europe continues to seek reliable energy supplies, while Canada has the potential to expand its role as an energy exporter. The summit declaration includes a joint long-term feasibility study on liquefied natural gas exports to Europe. But we should clarify here that the two sides have not announced a completed LNG export agreement or a guaranteed expansion of Canadian shipments. They have agreed to examine the commercial, infrastructure and strategic conditions necessary to make additional exports viable.

The broader energy relationship will also include cooperation on nuclear technologies, electricity grids, battery storage and the protection of energy infrastructure against physical and cyber threats. For Canada, the opportunity is to become a more important energy supplier to a diversified group of international partners. For Europe, the objective is to increase energy security while maintaining its climate commitments. Whether the two ambitions can be reconciled commercially and politically remains to be seen.

The European association question

Perhaps the most politically interesting part of the summit concerns the future institutional relationship between Canada and the European Union. And the most important word here is "future".

The joint declaration commits both sides to work towards defining an even closer association by the 2027 Canada-EU summit, explicitly stopping short of full EU membership. While this is not a membership application, nor is Canada being offered the status of an EU member or associate member, it is instead an attempt to establish a deeper political, economic and strategic relationship, with more frequent high-level consultations and closer coordination on shared priorities.

Let's not confuse the two. Canada is geographically outside Europe and has its own constitutional, political and economic framework. Nevertheless, it shares extensive institutional and commercial connections with European countries. The question is how far those connections can be developed without requiring membership of the European Union. Carney appears interested in exploring precisely that possibility.

Trump Eavesdropping

For decades, Canada's economic prosperity and security have been closely connected to the United States. So, no examination of this initiative would be complete without considering Washington. The relationship remains fundamental, but its vulnerabilities have become more visible. And Donald Trump has weaponized them. Tariffs, trade disputes, sovereign threats, uncertainty surrounding continental economic arrangements, and the growing politicization of international commerce have forced Ottawa to reconsider how much strategic dependence is prudent.

So, for the next two years at least, Carney has to stick to this plan and give Canada some room to breathe from American dependence. After all, diversification does not mean replacing the United States with Europe. The economic scale of the American market makes that unrealistic. It means ensuring that Canada has more choices when negotiating trade, securing investment, developing technology, and protecting essential supply chains. The European partnership offers an opportunity to strengthen those choices.

There is also a broader geopolitical dimension. Canada and Europe have common interests in defending international law, democratic institutions, open markets and a rules-based international order. Those shared interests are becoming more significant as geopolitical competition intensifies.

From diplomatic ambition to economic capacity

The Montréal summit has produced an ambitious framework, but declarations are easier than implementation. Critical-minerals projects require investment, infrastructure, regulatory approvals, and commercially viable markets. New energy exports require terminals, pipelines, shipping capacity and long-term buyers. Digital infrastructure requires financing and security guarantees, and research partnerships need funding and institutions capable of translating cooperation into technological development.

There are also political differences between Canada and individual European governments that will have to be managed. That will require a Herculean effort. Ultimately, the alliance will be measured by what actually gets built, financed, traded and protected. In this sense, the 2027 summit will provide an important opportunity to assess progress towards the proposed closer association.

For Marc Carney, the challenge is to turn diplomatic ambition into economic capacity and lasting strategic relationships. Canada cannot choose its geography, and it cannot simply walk away from its relationship with the United States. But it can choose to reduce unnecessary dependence, expand its international partnerships and create more room to manoeuvre. The Alliance for the Future is an attempt to do exactly that. And perhaps its most important message is that Canada's future need not be defined exclusively by its relationship with its southern neighbour.

A country with the resources, institutions and international connections of Canada has more than one direction in which to look.