EU rebuffs Carney’s ‘unique alliance’ with Canada

Prime Minister Mark Carney is positioning Canada as a safe haven for some of the world's top investors amid rising geopolitical and economic uncertainty. During a summit in Toronto, Carney touted the nation's strategic location to capitalize on the evolving global economic landscape. The prime minister pledged to attract C$1tn in investments over the next five years, aiming to lessen Canada's dependence on the United States.

The summit served as a trial to determine if Carney can fulfill his commitments to bolster economic resilience. The stakes are high, as the ongoing trade dispute with the US has driven Canada to forge stronger economic ties with Europe, Asia, and the Middle East. Here are five key takeaways from the summit held on Tuesday. Carney mentioned that the summit presented an opportunity for the high-net-worth financiers attending, representing over C$120tn of assets, to scrutinize the country's offerings.

Over 160 projects were presented, ranging from data centers to pipeline expansions and port upgrades. Ottawa also unveiled a series of new tax incentives, including a significant deduction measure, to attract potential buyers. Carney emphasized the government's efforts to expedite approvals for large-scale projects. Economic analysts have noted that Canada requires substantial policy adjustments to entice investment, such as more competitive tax and regulatory frameworks and ensuring a skilled workforce.

Carney assured Ottawa would provide predictability for major proposed projects, with a goal of a one-year review timeline. If a project is rejected, a swift rejection is necessary, he stated. On Monday, Carney engaged in bilateral meetings with chief executives from prominent finance firms, such as BlackRock's Larry Fink and Blackstone president Jon Gray.

A notable announcement from the summit was Carney's plan to permit private investment in four of Canada's main airports, namely Toronto, Vancouver, Montreal, and Calgary. The prime minister claimed the plan would generate billions of dollars that could be reinvested in transportation infrastructure, including smaller regional airports.

However, labour unions have criticized the proposal, arguing that it would be detrimental to workers and passengers. In contrast, Nick Barry-Shaw of the advocacy group Council of Canadians described it as a privatisation summit, stating that Canada is selling rather than building. During the summit, Carney's office reported that the event had generated nearly C$500bn in new investments across sectors like critical infrastructure, digital technology, energy, and defence.

One sector that garnered significant interest was AI infrastructure projects. Canada's cold climate, vast space, and clean energy grid provide ample space and capacity to develop infrastructure like data centers, according to Aidan Gomez, co-founder of AI firm Cohere. Dave McKay, CEO of RBC, one of Canada's largest banks, remarked that there had been a consistent message between the prime minister and executives, all pulling in the same direction.

Meanwhile, UK leaders are reportedly considering joining a global defence bank led by Canada. Carney's evolving relationship with the EU is closely tied to the tense US situation. Former Goldman Sachs executive and central bank chief Carney had previously vowed to take a firm stance against the US. After trade talks unraveled last month, the two nations have imposed retaliatory tariffs and engaged in a verbal clash.

Despite the ongoing tensions, Carney reassured American executives in Toronto, stating that Canada will remain the US's most crucial partner in key areas, even during disagreements. Protesters accused the Carney government of organizing a significant Canadian sell-off of public resources and infrastructure to corporate entities, with hundreds gathering outside the opening night gala at a downtown museum.

Critics contend that selling off portions of the country to American billionaires brings Canada closer to becoming the 51st state.