Canada

What does the map enable, and what does it threaten?

Canada's map is one of the richest in the world: the second-largest country by area, with oil, gas, minerals, timber, farmland and fresh water, three oceans and no hostile neighbour. Its one land neighbour is also its weakness. The United States took 71.7% of its exports in 2025, down from 75.9% the year before⁸, so Canada's prosperity depends on access to a single market it does not control. Its Atlantic and Pacific ports make diversification possible but costly, because so much of its infrastructure runs north to south. Vast and secure, but bound to one customer.

Is the population growing, skilled and staying?

Canada has a skilled, educated population of about 40 million, with a median age near 41^1,2, sustained by large-scale immigration. Its schools still rank well, but they are slipping: Canada's mathematics score fell 15 points between 2018 and 2022 in PISA¹². The labour market is weakening too. The economy shed 68,000 jobs in September 2026, the second monthly decline in a row, pushing unemployment up to 6.5%⁴. A strong workforce, with its quality and its jobs both under pressure.

What habits does the society reward?

Canada's institutions rest on habits LKY valued: rule-following, clean administration, and a broad respect for law. It scored 75 on Transparency International's 2025 index, unchanged, ranking 16th of 182⁶. Students' results are declining, which points to weaker habits of learning or teaching¹². Comparable data on work norms and trust over time is thin, hence medium confidence. This score is about institutions and social habits, not about any group.

Who rules, how are they chosen, and are they competent?

Mark Carney's government has done some of what it promised. It has brought defence spending to NATO's 2% of GDP target¹⁰. It campaigned for unity in Alberta, and the province voted by about 76% to stay in Canada¹¹. But on the central problem, the United States, it has had less success: Washington declined to renew the CUSMA trade pact at its first joint review in July, though Canada and Mexico both wanted a further 16-year term⁹. Jobs are now being lost⁴. Competent and steady, not yet decisive where it matters most.

Is there rule of law, low corruption and predictability?

Order is Canada's firmest pillar. It scored 75 on Transparency International's 2025 index and ranked 16th of 182 countries⁶. Courts are independent, elections are clean, and power changes hands peacefully. The clearest proof came in October 2026, when Alberta held a referendum on beginning a process toward separation and voters rejected it by about 76% to 24%¹¹: a challenge to the country's unity was settled at the ballot box. A single corruption index carries much of this judgement, hence medium confidence. A major strength.

Where are the fault lines, and how stable are they?

Canada's federation has been under strain, and has just passed a test. In October 2026, Alberta voters were asked whether to remain in Canada or begin a process that could lead to separation; about 76% chose to remain¹¹. The prime minister called it a great result for unity¹¹. Grievances remain: about a quarter of Albertans backed the separation process¹¹, and the trade fight with the United States is hitting regions unevenly, with recent job losses concentrated among youth and public-sector workers, and in Quebec⁴. The national mood has hardened in Canada's favour, but regional resentments run deep. Improving, from a strained base.

Why does the world need this country?

Canada matters to the world economy as a G7 member and a large supplier of energy and raw materials. The IMF puts its 2026 GDP at about US$2.5 trillion³. Its top credit ratings make it a safe home for capital⁷. Its weight in Washington is less than its size suggests: the United States declined to renew the trade pact at the July review⁹, and still takes most of Canada's exports⁸. Its influence elsewhere is growing slowly as it seeks new markets⁸. What holds the score down is how much of its standing depends on one relationship.

What does it need, want and fear?

Need: access to the US market, which took 71.7% of its exports in 2025⁸, under a trade pact that Washington has declined to renew⁹; and a united federation¹¹. Want: new markets in Europe and Asia to reduce dependence on its neighbour⁸; stronger armed forces, after reaching NATO's 2% target¹⁰; and growth that brings back lost jobs⁴. Fear: a US tariff regime that hollows out its industry; US withdrawal from the trade pact; renewed separatist pressure in Alberta or Quebec; and Arctic competition with Russia and China.

Who are its patrons, rivals and hedges?

Canada's position has rested for 80 years on a close alliance with the United States, and that foundation is cracking. It is a NATO member that has just reached the alliance's 2% spending target¹⁰, but its main economic pressure now comes from its ally. Washington declined to renew CUSMA in July 2026 and has preferred separate, bilateral talks with Canada and Mexico rather than three-way negotiations⁹. Canada has begun to diversify, with the US share of exports falling to 71.7% in 2025⁸, but it has no alternative of comparable size. Secure from enemies, squeezed by its friend.

Can it deter, or does it depend on others?

Canada's armed forces are small for its size, but the trend has turned. The government says Canada reached NATO's 2% of GDP target¹⁰; SIPRI, on its own measure, puts 2025 spending at 1.63% of GDP, up from 1.14% in 2022⁵. The extra money is recent and its results in capability are not yet visible. Canada has no nuclear weapons and relies on the United States and NATO for deterrence. Readiness data is limited, hence medium confidence.

Rising, stagnant or declining, and how fast?

Judged by results, Canada is slowing. The IMF records growth of 2.0% in 2024 and 1.9% in 2025, and forecasts 1.1% in 2026³. The labour market has turned down, with 68,000 jobs lost in September and unemployment at 6.5%⁴. Gross government debt is about 116% of GDP in 2026, on the IMF's measure³. The trade pact with the United States now faces annual reviews rather than a 16-year extension⁹. Diversification is real but slow⁸. Stable institutions, a weakening economy.