(first published in the Niagara Independent)

It’s no secret that Prime Minister Mark Carney closely identifies with Europe and has stated that he believes Canada should move closer to Europe economically. Carney has even claimed to be European in the past, as is well documented, and lived there for years before deciding to come back to Canada just in time to take over leadership of the Liberal Party. He has also made a big deal about Canada moving away from our long-time major trading partner, the U.S., in favour of Europe and, strangely, also Communist China. This is a politically motivated goal, as it is well-known that a considerable percentage of Canadians despise U.S. President Donald Trump and that sentiment was a big factor in the Liberals winning a minority government in the April 2025 federal election. Clearly the Liberals want to keep this Trump-hate alive as it benefits them electorally, even if it may be a bad thing for the Canadian economy and jobs for Canadians. 

There has been very little scrutiny, however, as to exactly how feasible it is for Canada to increase trade with European countries and replace much of our trade with the U.S. as a result. A number of other Canadian governments in the past have attempted to move away from our trading relationship with the U.S., and they all failed miserably. The Trump-haters in Canada appear to have bought into this notion that trade with other countries could replace the U.S. for Canada, despite their being much evidence that it’s impossible. There has also been little examination of exactly how increased trade with Europe might look for Canada. 

Europe today is in big trouble. The economies of the European Union (EU) have for years been sluggish at best, largely because of overly intrusive governments imposing far too many regulations that stifle economic growth. Open immigration from less developed countries has also had its impact in increasing social welfare costs, promoting societal upheaval, stressing government programs such as health care and importing people who do not share Western values of freedom, equity and democracy. Most European countries also completely bought into the so-called climate crisis and made many changes in their energy industry to comply with the concerns of climate alarmists. The experience of Germany represents a valuable case study. 

For decades, Germany was the industrial giant of Europe, consistently punching above its weight in terms of economic growth. Then Chancellor Angela Merkel decided to muck around with the energy mix, driven by the Japanese tsunami that caused a major crisis at the Fukushima Daiichi Nuclear Plant. This led to much concern about nuclear power and caused Merkel to react by shutting down all of their nuclear plants. The Japanese nuclear plant was very old technology and not comparable to modern nuclear facilities, so the concern was greatly exaggerated but encouraged the perennial anti-nuclear lobby to become even more strident. Prior to the changes, nuclear provided about a quarter of all power in Germany. Merkel’s knee-jerk reaction to shut down nuclear power laid the groundwork for economic disaster for the country.  

The government promoted so-called “renewable” energy such as wind and solar, which increased electricity costs enormously for businesses and households. As wind and solar power are unreliable and intermittent, the logical back-up fuel to ensure reliability is natural gas. Germany, unlike Canada, is not blessed with reserves of natural gas, and believed that their imports from Russia would be reliably continued into the future. As we now know, that did not happen under the Putin regime and Germany needed to revert to the dirtiest energy source, coal, to try to keep its economy operating. 

What a ridiculous outcome for a country that was trying to reduce its carbon emissions. Germany’s massive industrial base shrank because of the lack of competitively priced energy. Some analysts believe the deindustrialization of Germany is permanent. Formerly dominant manufacturing businesses are leaving for China. It is no accident that German Chancellor Olaf Scholz in 2022 travelled to Canada to ask then-prime minister Justin Trudeau for LNG (liquid natural gas) exports. Trudeau absurdly said there was no business case for such exports, which was absolutely wrong as other countries were proving there was a very good business case indeed. 

Even without the panic about nuclear power, many of the same things have been happening in Canada as took place in Germany. Despite evidence that increasingly shows fossil fuels’ low cost and reliability cannot be replaced by intermittent sources such as wind and solar with current technology, Canadian governments continue to pump billions of tax dollars into these failed energy sources. Climate goals of greenhouse gas reductions are not achieved despite all of the tax dollars spent. And the Canadian economy and employment are hobbled by continued efforts to impose stifling regulations and carbon taxes, despite all the evidence they are useless. Although Carney has paused the consumer carbon tax and may make some concessions here and there on some other climate-related laws, we still don’t seem to have learned the lessons from other countries such as Germany. 

There is no doubt that Carney has a personal preference for Europe and will likely move there permanently after his political experiment in Canada is over. However, Canadians should not buy into the fiction that trade with Europe is a panacea and a replacement for trade with the U.S. The European experience, exemplified by Germany, is a cautionary tale for Canada, not something with which we want to link ourselves more closely in future or emulate in any way.

Catherine Swift

Catherine Swift is President of the Coalition of Concerned Manufacturers & Businesses of Canada (CCMBC). She was previously President of Working Canadians from 2015-2021 & President & CEO of the Canadian Federation of Independent Business (CFIB) from 1995-2014. She was Chief Economist of the CFIB from 1987-1995, Senior Economist with TD Bank from 1983-1987 & held several positions with the federal government from 1976-1983.

She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.

She has an Honours BA and MA in Economics.