Canada is entering a critical period of structural and geopolitical transformation. The July 2025 U.S.–EU trade pact reshaped global trade flows, placing pressure on non-aligned countries like Canada to recalibrate their policy and trade architecture. Simultaneously, the emergence of a global capital rotation into hard assets. Led by gold, and now increasingly visible in silver, copper, and lithium, positions Canada as a potentially key beneficiary, if domestic constraints can be lifted.
Canada’s future economic trajectory hinges on its ability to modernize its trade posture, remove domestic policy barriers such as supply management, and align more closely with global commodity flows. Inaction could result in increased unemployment, housing market contractions, regional political instability, and lost opportunities during the most significant global commodity supercycle since the early 2000s.
Global Trade Realignment and Canada’s Vulnerabilities
The U.S.–EU trade deal signed in July 2025 imposes 15% tariffs on 70% of EU exports to the United States while eliminating U.S. tariffs on goods sent to the EU. As part of this deal, the EU also committed to $750 billion in energy purchases from the U.S., redirecting global trade and investment flows. The news is a major win for Trump and a significant shift in global trade, as follows:
- Strategic Economic Victory: The deal strengthens the U.S.’s position as the dominant energy and trade supplier to Europe, locking in $750 billion in energy exports and reshaping supply chains to favor American goods over competitors. This solidifies Trump’s “America First” agenda by securing long-term economic leverage in transatlantic trade.
- Global Trade Realignment: By excluding key allies like Canada and prioritizing bilateral agreements with the EU, the deal marks a clear departure from multilateralism, accelerating the fragmentation of global trade networks. This shift forces other countries to adapt or risk losing market share, creating winners and losers in a new, more competitive trade landscape.
To date, rather than scrambling to secure these lucrative opportunities, Canada continues to prioritize its self-styled moral leadership over economic pragmatism. While allies chase billion-dollar deals, Canada remains focused on demonstrating how to be “better,” even if that means watching from the sidelines while its economic architecture and domestic inefficiencies limit its ability to capitalize on these global shifts.
Canada’s key vulnerabilities include:
- An entrenched supply management system that restricts dairy, poultry, and egg trade liberalization.
- A carbon pricing regime that diverges from U.S. and emerging Asian norms, exposing Canadian exporters to carbon border adjustment measures (CBAM).
- Limited enforcement of trade dispute mechanisms, especially under CETA.
- Regulatory fragmentation, especially interprovincial trade barriers.
No confusion here; the new EU–US trade deal is bad news for Canada. Really bad.
By securing huge energy purchases and special trade terms with the U.S., the EU is effectively cutting Canada out of important markets and supply chains. This puts Canada at a disadvantage, diverting investment and business away just when the global trade landscape is changing fast.
With Canada’s own trade policies slow to adapt, this deal could mean fewer jobs, slower growth, and a weaker economy unless Canada acts quickly to reform and find new opportunities.
Security and Policy Pressures from the U.S.
U.S. trade policy is no longer just about economics—it’s increasingly shaped by national security concerns. Canada is under growing pressure from Washington to take meaningful action on two fronts:
- Fentanyl & Port Security: U.S. authorities have flagged Canadian ports, especially Vancouver and Montreal, as key entry points for fentanyl precursors. Washington is demanding tougher enforcement, warning that trade inspections or penalties may follow if the situation isn’t addressed.
- Immigration & Border Control: Rising irregular migration through unofficial Canadian border crossings has sparked concern in U.S. states. Some U.S. lawmakers are now pushing to tie visa access and trade benefits to Canada’s border enforcement.
If Canada fails to act, retaliatory trade measures such as border slowdowns, inspections, or new restrictions could disrupt supply chains and reduce export competitiveness. This poses risk to sectors reliant on U.S. trade, particularly agriculture, manufacturing, and cross-border logistics.
On the flip side, a strong Canadian policy response could safeguard trade stability, restore investor confidence, and even unlock negotiation space in future U.S.-Canada deals. It would require prioritizing outcomes over optics and shift the focus from well-crafted press conferences to actual enforcement.
In short, how Canada handles these issues will directly impact the market outlook across multiple sectors. Investors should watch policy signals closely.
Global Capital Rotation into Commodities – Canadian Realignment
Canada is sitting on a trove of globally sought-after resources that are key to the world’s energy transition and industrial growth. For investors, this represents a potentially lucrative opportunity, especially as mounting economic and geopolitical pressures force Canada to rethink long-standing policies.
Why Investors Should Pay Attention
- Undervalued Assets with Upside Potential: Due to regulatory delays, political uncertainty, and policy rigidity, many Canadian resource projects are undervalued or underdeveloped.
- Policy Change on the Horizon: The global demand for critical minerals and energy is intensifying, and Canada cannot afford to stay sidelined. Increasing trade pressures, capital flows into hard assets, and internal political demands are driving calls for reforms.
- First-Mover Advantage: Early investment in exploration, mining, processing, and energy infrastructure companies can capture growth as Canada accelerates approvals and infrastructure development to compete globally.
- Diversification in a Commodity Supercycle: The expanding demand for battery metals like lithium and copper, combined with renewed interest in oil and coal, offers diversified exposure within the natural resource sector.
Changing Geopolitics will Force Regional Change
- Regulatory Bottlenecks: Lengthy environmental and indigenous consultations, multiple jurisdictional approvals, and inconsistent provincial rules have slowed project timelines and increased costs.
- Supply Management and Trade Restrictions: While these policies have limited broader economic growth, mounting trade pressures from major partners and internal economic challenges are forcing reconsideration.
- Carbon Pricing and Environmental Policies: These add compliance costs and uncertainty today, but new frameworks are expected to balance climate goals with competitiveness, offering clearer paths for sustainable resource development.
- Political Dynamics: Rising regional tensions and calls for economic pragmatism over ideology suggest Canada will need to reconcile diverse interests to remain globally competitive.
Economic Risks of Inaction are Grave
- Unemployment Risk: Without improved trade access or structural reforms, Canadian manufacturers, agri-processors, and exporters risk job losses due to supply chain shifts and competitive disadvantage.
- Housing Market Consequences: Rising unemployment, immigration bottlenecks, and diminished investor confidence could depress housing prices.
Political Cohesion Threats: Alberta Separatism
- Alberta, rich in oil, gas, and critical minerals, may feel increasingly marginalized if global energy flows and capital bypass Canada.
- Existing tension around carbon taxation and equalization payments could escalate.
- Rising separatist rhetoric and efforts toward provincial autonomy (pensions, tax collection, resource control) could intensify if federal policy is seen as neglecting Western economic interests.
Strategic Sectoral Opportunities (if Conditions Improve)
Precious Metals
- Sustained central bank demand and currency debasement fears will support continued growth.
- Canadian producers and explorers could expand if capital and permitting flow.
Base Metals & Battery Inputs
- Copper and lithium represent the spine of the electrification and EV wave.
- Investment in exploration, refining, and vertical integration is vital.
Energy & Hydrocarbons
- With LNG Canada Phase 1 near completion, export infrastructure is catching up.
- Global demand for reliable fossil energy is rising; Canada can reassert itself if environmental compliance does not choke competitiveness.
Infrastructure & Logistics
- Export terminals, rail, and intermodal nodes will become more critical.
- Investment in cold-chain, border inspection technology, and inland ports offers national security and trade resiliency benefits.
Conclusion: Canada Must Choose Leadership or Marginalization
Canada sits atop some of the world’s most valuable assets for the coming economic era: abundant reserves of clean energy resources, rich deposits of precious metals, critical battery minerals essential to the green transition, and a stable political environment that few other countries can match.
These strengths position Canada to be a global leader in supplying the materials and energy that will power the 21st century economy. However, without bold and timely policy reforms, these natural advantages risk being wasted. Bureaucratic delays, regulatory gridlock, and protectionist policies threaten to sideline Canadian resources just as global demand accelerates.
The shift toward investing in tangible hard assets goes far beyond a passing commodity cycle; it is a fundamental, structural change in the global economy. Investors, governments, and industries worldwide are recalibrating their strategies around this new reality.
For Canada to maintain its economic relevance and secure long-term prosperity, it must modernize its trade policies, streamline regulatory processes, foster greater integration across provinces, and position itself as a reliable, competitive supplier on the world stage.
The clock is ticking. The choices Canada makes today will determine whether it leads in this new order or becomes marginalized. And for those banking on moral superiority, oat milk lattes, and carbon offset schemes alone to carry the economy forward, remember, when unemployment soars toward 20%, lofty ideals won’t pay the bills. Economic pragmatism must guide trade and resource policy if Canada wants to thrive.
About Moneta
Moneta is a boutique investment banking firm that specializes in advising growth stage companies through transformational changes including major transactions such as mergers and acquisitions, private placements, public offerings, obtaining debt, structure optimization, and other capital markets and divestiture / liquidity events. Additionally, and on a selective basis, we support pre-cash-flow companies to fulfill their project finance needs.
We are proud to be a female-founded and led Canadian firm. Our head office is located in Vancouver, and we have presence in Calgary, Edmonton, and Toronto, as well as representation in Europe and the Middle East. Our partners bring decades of experience across a wide variety of sectors which enables us to deliver exceptional results for our clients in realizing their capital markets and strategic goals. Our partners are supported by a team of some of Canada’s most qualified associates, analysts, and admin personnel.