Prime Minister Mark Carney has ushered in a new era for Canada’s foreign and economic policy, marked by a rapid warming of relations with China and a dramatic pivot in the nation’s energy strategy. The moves, announced in late November 2025, signal Carney’s determination to steer Canada through mounting trade tensions with the United States, even as critics warn of the risks of closer ties with Beijing and a retreat from climate commitments.
Carney’s diplomatic overture came during the Asia-Pacific Economic Co-operation summit in South Korea, where he met with Chinese President Xi Jinping and accepted an invitation to visit China. According to the National Post, Carney described the meeting as a “turning point” in Canada-China relations. This followed an October announcement by Foreign Affairs Minister Anita Anand, who, after talks with her Chinese counterpart, said Ottawa and Beijing had agreed to revive a “strategic partnership.” Anand framed the renewed engagement as a “forum to assert Canada’s interests,” and Carney reportedly raised concerns about foreign interference with Xi.
Yet, for many observers, the speed and enthusiasm of the rapprochement raise troubling questions. As Nathan Law and Daniel Dorman wrote in the National Post, “Canada-China relations seem to be progressing in a historical vacuum, as if the last decade of China’s aggression towards Canada and total disregard for human rights was wiped away with the most recent election cycle.” The authors point to the chilling episode of “hostage diplomacy,” when two Canadians, Michael Kovrig and Michael Spavor, were detained in China for more than 1,000 days. The 2025 final report of the Hogue Inquiry, referenced by National Post, was blunt: “The People’s Republic of China (PRC) is the most active perpetrator of foreign interference targeting Canada’s democratic institutions.” The report also warned of sophisticated cyber threats and disinformation campaigns, including documented efforts to undermine Canadian elections.
China’s human rights record remains a point of deep concern. As The Economist recently detailed, Beijing continues to crack down on Christian leaders using late-night arrests reminiscent of the darkest days of Soviet repression. Since 2020, Canada has watched as Hong Kong’s pro-democracy movement has been stifled under the National Security Law. In 2021, Canada’s Parliament unanimously recognized China’s treatment of the Uyghur minority as genocide. These facts, critics argue, make the government’s embrace of Beijing all the more jarring.
Michael Kovrig, the Canadian diplomat once detained in China, offered a stark warning in a recent interview: “If you create dependency on China, it will weaponize it for political purposes and to silence Canada and constrain our foreign policy.” This sentiment was echoed by Howard Anglin, former deputy chief of staff to Stephen Harper, who argued in 2021, “When we engage with the Chinese government, we deal with an outlaw regime that holds us in even lower contempt than the rule of law.”
Canada’s own Indo-Pacific Strategy, as cited by the National Post, describes China as “an increasingly disruptive global power” that has benefited from, but now disregards, international rules and norms. Despite these warnings, Carney’s government appears intent on forging ahead, motivated in part by the desire to diversify Canada’s economic ties away from the United States and toward “the economic giants of Asia.”
This strategic realignment is not limited to foreign policy. On November 28, Carney announced a major agreement with Alberta’s premier aimed at boosting energy production and reducing dependence on the U.S. market, which currently absorbs 90 percent of Canada’s oil exports. As reported by National Post and industry sources, the deal rolls back certain climate rules, including scrapping a planned emissions cap on the oil and gas sector and dropping regulations for clean electricity. In exchange, Alberta has committed to strengthen industrial carbon pricing and support a major carbon capture-and-storage project.
At an industry event in Calgary, Carney laid out the stakes: U.S. tariffs and the uncertainty they generate will cost Canada $50 billion, or roughly $1,300 per Canadian. “This government will do whatever it takes to protect our sectors,” Carney declared at a news conference. “Not just protect them, but to help them reposition for the new global economy.” He stressed the need to build projects that can drive growth and reduce reliance on the U.S., including encouraging the construction of a new oil pipeline to the West Coast.
The energy deal has been welcomed by Canada’s oil industry but criticized by environmentalists and some within Carney’s own government. Steven Guilbeault, who served as environment minister under former Prime Minister Justin Trudeau, resigned from the cabinet in protest, citing concerns that Canada’s climate plan was being dismantled. The agreement marks a significant shift from Trudeau-era policies, relaxing environmental restrictions while reaffirming a commitment to net-zero carbon emissions by 2050.
Carney’s government has also taken steps to shield other vulnerable sectors from U.S. trade actions. On November 28, he unveiled new measures to support the steel and lumber industries, both battered by President Donald Trump’s tariffs. Canada will impose a 25 percent tariff on a range of steel products, including prefabricated buildings, wire, and fasteners—about 40 percent of which come from the United States. The government also plans to reduce the amount of foreign steel allowed into the country and lower rail costs for moving lumber and steel, according to Canadian officials.
When asked about the possibility of renewed talks with the U.S., Carney was circumspect. He acknowledged a recent conversation with President Trump but dismissed it as “not newsworthy,” adding that “no talks were underway between the two countries right now.” Still, Carney struck a conciliatory note: “Of course we want to further improve the existing trading relationship with the United States. We stand ready to re-engage when they are. But, at the same time, we’re going to do a few other things.”
As Canada embarks on this new course, debate is intensifying across the country. Supporters of Carney’s approach argue that diversifying trade partners and bolstering energy exports are pragmatic responses to a volatile global landscape. They see the revived China partnership and energy deal as necessary steps to safeguard Canadian prosperity and sovereignty. Detractors, however, warn that the government is overlooking the risks of entanglement with an authoritarian regime and backsliding on environmental commitments. The shadow of China’s human rights abuses, interference in Canadian democracy, and history of economic coercion looms large in their criticisms.
For now, Carney is betting that a bold pivot—both eastward and toward energy development—will help Canada weather the storm. Whether this gamble pays off, or brings new challenges, remains to be seen. The country’s next moves will be watched closely, both at home and abroad.