By Branka Marijan and Jessica Stewart
Canada has long prided itself on being a reliable ally with a measured approach to foreign policy, but in recent years it has faced mounting geopolitical challenges. Tensions with China rose sharply after the detention of Huawei executive Meng Wanzhou, while relations with India have deteriorated to their lowest point in decades. Even Canada’s closest neighbour and traditional ally, the United States, has become unpredictable under the second Trump administration, which has called for 25 per cent tariffs on Canadian goods. These challenges underscore the need for Canada to seek more comprehensive security and economic alliances to secure its future.
The global security environment is becoming more complex. Several states now employ a potent mix of diplomatic, informational, military, and economic tactics to influence their friends and foes alike. Canada relies on competitive trade with global partners to create jobs at home and offer its citizens choice in consumer goods. Yet being a trading nation also exposes Canada to economic coercion. Trading partners can use – and are using – coercive economic pressure to force Canada’s hand on everything from defence procurement to foreign relations.
To preserve resilience in an era of technological flux, Canada must not only diversify its economic base but the diplomatic machinery that underpins it. Traditional diplomatic training seldom covers data analytics, artificial intelligence (AI) ethics, or digital trade standards. Right now Canada’s diplomatic corps has only a handful of officials to deal with the arms-control challenges posed by emerging technologies, lagging behind those of other likeminded countries like the Netherlands, United Kingdom, and France. By moving away from the current generalist model and scaling up its diplomatic capabilities in the digital domain, Canada will be able to develop diplomats who can handle complex negotiations around intellectual property, data governance, and cybersecurity.
One way for Canada to reduce reliance on any single market while showcasing leadership and addressing its waning middle-power status is to invest more heavily in intangible assets—everything from patents and data to software, design, and brand power.
The global economy is increasingly shaped by entities that trade ideas, information, and intellectual property. One way for Canada to reduce reliance on any single market while showcasing leadership and addressing its waning middle-power status is to invest more heavily in intangible assets—everything from patents and data to software, design, and brand power.
As a mid-sized power, Canada cannot rely on weight alone; it must bring specialized expertise to the table. A strong diplomatic corps, well versed in the intricacies of technology policy, can help Canada shape international norms on AI, protect its intangible assets abroad, and preempt foreign meddling in critical industries.
The creation of such a corps will require coordinated action on multiple fronts:
- Canada must foster a deeper culture of innovation. Government support for research and development lags behind the levels provided to leading tech hubs such as Silicon Valley or Shenzhen. Canada’s AI community, anchored by strong academic centres in Toronto, Montreal, and Edmonton, is off to a good start. Yet many promising start-ups struggle to scale up because of limited access to venture capital or because they are snapped up by foreign investors. Keeping more intellectual property and its resulting revenues at home will require not only financial incentives but skilled negotiators capable of reaching equitable deals with global partners.
- Policymakers should reexamine and revise immigration rules to attract top-tier technology talent from around the world. Streamlining visa pathways for high-skilled talent will signal that Canada is committed to emerging-tech leadership. However, because tech salaries in the United States are about 46 per cent higher than those in Canada, attracting and retaining such talent will remain a formidable challenge. Without competitive incentives—such as targeted research grants, startup incubators, and strategic partnerships—Canada risks losing top-tier innovators to more lucrative markets.
- Canada must develop tools that more effectively protect its intangible assets. While laws governing resource extraction or trade in physical goods are well established, legislation on data privacy, intellectual property rights, and cross-border data flows is still evolving. Tech-savvy diplomats are needed to negotiate modern rules that benefit Canadian industry. Crafting regulations for digital platforms and cloud computing, for instance, can establish the country as a trusted innovation hub. Such an approach also safeguards Canadian firms from predatory practices by cybercriminals, unscrupulous competitors, or foreign powers seeking a technology edge.
Cooperation among federal and provincial governments will be crucial. All provinces have contributions to make. Research might flourish in Ontario, while advanced manufacturing that integrates AI or robotics may cluster in Quebec or British Columbia. National coordination can foster technology corridors, support research centres, and encourage complementary specializations. But success also depends on aligning these efforts with a foreign policy that boldly pursues global opportunities.
In the meantime, Canada cannot simply cut its longstanding ties to the United States. As Deputy Minister of Foreign Affairs David Morrison observed, a secure relationship with its southern neighbour remains vital to Canada. However, too much dependence on a single market leaves Canada exposed to hostile action, as the ongoing tariff challenges reveal too vividly. The Trump administration’s apparent wish to annex Canada for its critical minerals represents an unprecedented rift in this relationship. Extending diplomatic ties in Europe, the Asia-Pacific region, or Latin America could reduce the harm caused by further intensification of tensions with the United States or ongoing strained relations with China.
Beyond trade and innovation, Canada must also tackle the security implications of emerging technologies. The rise of lethal autonomous weapons, AI-driven warfare, and other novel military applications demand a diplomatic vision that extends beyond economic policy. In an era of rising geopolitical competition and rapid technological change, investing in strategic diplomacy and global leadership to support robust normative frameworks is not just an option—it is a necessity. By fielding diplomats nimble enough to defend those ideas and prioritizing intangible assets Canada can insulate itself from external shocks and discover that the best security in an uncertain world lies in the power of responsible innovation and robust global engagement.
