Carney tells Toronto summit Canada will pursue 'unique' EU alliance

EU-Canada trade hits €130bn as 10 member states stall CETA ratification

Carney used his opening address to the inaugural Canada Investment Summit in Toronto on Tuesday to lay out the case for a “unique security and economic alliance” with the European Union. Carney said the relationship with the United States had fractured over the last 18 months, with economic integration being weaponised and tariffs used as leverage.

“Canada recognised the rupture earlier than most,” Carney said. “Our response reflects the two lessons we have taken from it: First, we must take care of ourselves, and second, we must take care of each other. Taking care of ourselves means building our strength at home and diversifying our partnerships abroad.”

Carney characterised the world as “more divided and dangerous,” framing sovereignty and openness as now in tension — a reference to the trade posture of US President Donald Trump. The prime minister framed Canada as a “safe harbour” and lucrative home for foreign capital as his government works to reduce its reliance on US trade. Senior Canadian officials at the summit projected a sense of optimism that Canada’s more global perspective could usher in hundreds of billions in fresh investment into the country.

The Canadian pitch to the EU builds on existing cooperation: Canada earlier this year became the first non-European country to join the EU’s €150bn defence loans scheme, expanding opportunities for Canadian defence firms to supply Europe. The two sides already operate under a free-trade agreement plus separate deals on digital cooperation, raw materials, research and a shared green alliance. Carney noted that Canada is the only non-European member of Europe’s defence procurement initiative and said his government will pursue a “unique” relationship with the bloc. He mentioned the prospect of visa-free travel and work between Canada and the EU, but said the two were in the early stages of talks.

European officials are seeking to bring Canada as close as possible to the EU short of membership, but the arrangement will not be called associate membership, as the EU seeks to maintain a clear distinction between members and non-members. The EU’s experience with Brexit cemented its preference against splitting the four freedoms of its single market — free movement of people, services, goods and capital — so any deepening of the Canada relationship will be built around that red line. More immediately, the EU hopes to improve ties on raw materials and energy.

Carney will be guest of honour at the European parliament’s plenary in Strasbourg this week. He will attend European Commission President Ursula von der Leyen’s annual state of the union speech on Wednesday, then address MEPs on Thursday in von der Leyen’s presence. Von der Leyen changed her plans to stay in Strasbourg after criticism of her initial “unacceptable” decision to skip Carney’s speech and return to Brussels.

EU-Canada trade in goods and services hit €130bn in 2025, an 80% increase since the Comprehensive Economic and Trade Agreement (CETA) was signed in 2016. That figure pales against trade with the US, which totals nearly $880bn. Ten EU member states, including France, Italy and Poland, have not ratified CETA nearly a decade after it was signed, leaving parts of the deal not yet in force.

French lawmaker Valérie Hayer, a centrist member of Emmanuel Macron’s alliance in the European parliament, acknowledged the problem: “In the French parliament this agreement has yet to be ratified, notwithstanding the [trade] figures which are extremely good. That is why I call on political leaders [in France] to do their bit to act responsibly as elsewhere to make sure that we [the EU] can count for more in world affairs.” Hayer’s centrist Renew group, the fifth-largest in the European parliament, is calling on EU member states and the commission to speed up CETA ratification and launch an awareness drive. With elections scheduled in France, Italy and Poland, progress on ratifying the 10-year-old agreement looks uncertain.

Javier Moreno Sánchez, a Spanish socialist MEP who leads the European parliament’s Canada delegation, said he wanted to hear “concrete steps” from von der Leyen on improving EU-Canada ties, including greater mobility for professionals, more student exchanges, and joint work on defence and artificial intelligence. “Canadians are the most European people outside Europe and that is the key point for the development of our relationship,” Moreno Sánchez said, citing the difficult geopolitical and geoeconomic situation and the strained relationship both Canada and the EU have with “our traditional partner, the United States.”

Carney acknowledged the geographic realities of Canada’s proximity to the US and the consensus among most economists that the US will remain Canada’s largest trading partner. “We will always be neighbours, and Canada will continue to be the US’s most important partner in many key areas,” Carney said. “These arrangements work when we engage as true partners that respect each other’s traditions and sovereignty.” Trump has both threatened Canada’s economy and mused about a North America under the umbrella of an expanded US in recent weeks.

Event host Erik Schatzker told attendees that Canada was neither a “bystander nor a victim” in the dramatic geopolitical shifts that have defined the Trump era. “Canada is a protagonist. Canada has agency. Canada is defining its own future,” Schatzker said.

Carney also announced policy moves on Tuesday. He unveiled a corporate tax “mega-deduction” that would let companies immediately deduct 100% of the cost of new investment across more assets than previously permitted, helping Canada compete with similar incentives in the US. Carney confirmed Canada would open four major airports to foreign investment to “unlock their true value,” saying his government would “apply [the] lessons” of instances where allowing partial private investment had failed.

Carney said foreign investment has dramatically increased and the federal government was on track to balance the operating budget one year ahead of schedule — an announcement that received applause from the summit audience. Ahead of Tuesday’s summit, the prime minister’s office announced nearly C$500bn in new domestic investment.

The push to attract foreign capital drew protests. Thousands gathered in downtown Toronto for the Many vs the Money counter-protest, where organisers said public money should not be used to reduce the risks of private investment while communities are left to shoulder the social and environmental costs of these projects. “Mark Carney’s here selling Canada to the international community,” said Stephen Hill, a lone protester standing outside the hotel as key figures arrived for the prime minister’s speech. “I’m Canadian. We’re an Aboriginal-led investment coalition. We want in. But you can’t get a returned email. You can’t get a returned phone call. You can’t get through to his ministers. So I’m here from British Columbia to try and get his attention and to tell him to think of Canadians first.”

“Canada has what the world wants,” Carney said during a media availability late Tuesday morning. “The difference, this week, is that we didn’t cross an ocean to make our case. The world came to us … but what matters most is what we do for ourselves.”