Energy
The Real Threat to Banks Isn’t From Climate Change. It’s From Bankers.
Over the last two years, some of the world’s most powerful and influential bankers and investors have argued that climate change poses a grave threat to financial markets and that nations must switch urgently from using fossil fuels to using renewables.
In 2019, the Federal Reserve Bank of San Francisco warned that climate change could cause banks to stop lending, towns to lose tax revenue, and home values to decline. Last year, 36 pension fund managers representing $1 trillion in assets said climate change “poses a systemic threat to financial markets and the real economy.”
And upon taking office, President Joe Biden warned government agencies that climate change disasters threatened retirement funds, home prices, and the very stability of the financial system.
But a major new staff report from the New York Federal Reserve Bank throws cold water on the over-heated rhetoric coming from activist investors, bankers, and politicians. “How Bad Are Weather Disasters for Banks?” asks the title of the report by three economists. “Not very,” they answer in the first sentence of the abstract.
The reason is because “weather disasters over the last quarter century had insignificant or small effects on U.S. banks’ performance.” The study looked at FEMA-level disasters between 1995 and 2018, at county-level property damage estimates, and the impact on banking revenue.
The New York Fed’s authors only looked at how banks have dealt with disasters in the past, and what they wrote isn’t likely to be the final word on the matter. The United Nations Intergovernmental Panel on Climate Change and most other scientific bodies predict that many weather events, including hurricanes and floods, which cause the greatest financial damage, are likely to become more extreme in the future, due to climate change.
And in February, The New York Times quoted one of six United States Federal Reserve governors saying, “Financial institutions that do not put in place frameworks to measure, monitor and manage climate-related risks could face outsized losses on climate-sensitive assets caused by environmental shifts.”
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But the Fed economists looked separately at the most extreme 10 percent of all disasters and found that banks impacted not only didn’t suffer, “their income increases significantly with exposure,” and that the improved financial performance of banks hit by disasters wasn’t explained by increased federal disaster (FEMA) aid.
In other words, disasters are actually good for banks, since they increase demand for loans. The larger a bank’s exposure to natural disasters, the larger its profits.
Happily, the profits made by banks are trivial compared to rising societal resilience to disasters, which can be seen by the fact that the share of GDP spent on natural disasters has actually declined over the last 30 years.
While scientists expect hurricanes to become five percent more extreme they also expect them to become 25 percent less frequent, and now, new data showglobal carbon emissions actually declined over the last decade, and thus there is no longer any serious risk of a significant rise in global temperatures.
Banking Against Growth
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Biden nominee Saule Omarova said she wants to bankrupt energy companies
The real risk to banks and the global economy comes from climate policy, not climate change, particularly efforts to make energy more expensive and less reliable through the greater use of renewables, new taxes, and new regulations.
“For policymakers,” warned the three economists writing for the New York Fed, “our findings suggest that potential transition risks from climate change warrant more attention than physical disaster risks.”
While they may seem like outliers, they are far from alone in expressing their concern. The second half of the quote by the Fed governor about climate change, which was hyped by The New York Times, warned that banks “could face outsized losses” from the “transition to a low-carbon economy.” (My emphasis.)
And, now concern is growing among members of Congress about the dangers of over-relying on weather-dependent energy, with some members citing the New York Fed’s report after The Wall Street Journal editorialized about it last week .
Proof of the threat to the economy from climate policy is the worst global energy crisis in 50 years. Shareholder activists played a significant role in creating it, according to analysts at Goldman Sachs, Bloomberg, and The Financial Times, by reducing investment in oil and gas production, and causing nations to over-invest in unreliable solar and wind energies, which has driven up energy prices, and contributed significantly to inflation.
And yet a crucial Biden Administration nominee for bank regulation has openly said she would like to bankrupt firms that produce oil and gas, the two fuels whose scarcity is causing the global energy crisis. Progressive academic, Saule Omarova, nominated by Biden, said recently that “we want [oil and gas firms] to go bankrupt” and that “the way we basically get rid of these carbon financiers is we starve them of their source of capital.
Omarova is not an outlier. The Biden Administration’s Financial Stability Oversight Council (FSOC) is advocating 30 new climate regulations that should be imposed on banking. Many analysts believe the US Securities and Exchange Commission will require new regulations. The goal is to radically alter how America’s banks lend money, the energy sector, and the economy as a whole.
And former Bank of England chief, Mark Carney, co-chair of the Glasgow Financial Alliance for Net Zero, has organized $130 trillion in investment and said recently that his investors should expect to make higher, not lower, returns than the market. How? In the exact same way Omarova predicted: by bankrupting some companies, and financing other ones, through government regulations and subsidies.
Carney created the Glasgow Financial Alliance, or GFANZ, with Michael Bloomberg, and they did so under the official seal of the United Nations. “Carney said the alliance will put global finance on a trajectory that ultimately leaves high-carbon assets facing a much bleaker future,” wrote a reporter with Bloomberg. “He also said investors in such products will see the value of their holdings sink.”
What’s going on, exactly? How is it that some of the world’s most powerful bankers, and the politicians they finance, came to support policies that threaten the stability of electrical grids, energy supplies, and thus the global economy itself?
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The Unseen Order
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Tom Steyer, Michael Bloomberg, and George Soros
Three of the largest donors to climate change causes are billionaire financial titans Michael Bloomberg, George Soros, and Tom Steyer, all of whom have significant investments in both renewables and fossil fuels.
Soros is worth $8 billion and recently made large investments in natural gas firms (EQT) and electric vehicles (Fisker), Bloomberg has a net worth of around $70 billion and has large investments in natural gas and renewables, and much of Steyer’s wealth derives from investments in all three main fossil fuels—coal, oil, and natural gas — as well as renewables.
All three men finance climate activists and politicians, including President Biden, who then seek policies — from $500 billion for renewables and electric vehicles over the next decade to federal control over state energy systems to banking regulations to bankrupt oil and gas companies — which would benefit each of them personally.
Bloomberg gave over $100 million to Sierra Club to lobby to shut down coal plants after he had taken a large stake in its replacement, natural gas, and operates one of the largest news media companies in the world, which publishes articles and sends emails nearly every day reporting that climate change threatens the economy, and that solar panels and wind turbines are the only cost-effective solution.
Soros donates heavily to Center for American Progress, whose founder, John Podesta, was chief of staff to Bill Clinton, campaign chairman for Hillary Clinton’s presidential campaign, and who currently runs policy at the Biden White House. So too does Steyer, who funds the climate activist organization founded by New Yorker author Bill McKibben, 350.org, which reported revenues of nearly $20 million in 2018.
The most influential environmental organization among Democrats and the Biden Administration is the Natural Resources Defense Council, NRDC, which advocated for federal control of state energy markets, the $500 billion for electric cars and renewables, and international carbon markets that would be controlled by the bankers and financiers who also donate to it.
In the 1990s, NRDC helped energy trading company Enron to distribute hundreds of thousands of dollars to environmental groups. “On environmental stewardship, our experience is that you can trust Enron,” said NRDC’s Ralph Cavanagh in 1997, even though Enron executives at the time were defrauding investors of billions of dollars in an epic criminal conspiracy, which in 2001 bankrupted the company.
From 2009 to 2011, NRDC advocated for and helped write complex cap-and-trade climate legislation that would have created and allowed some of their donors to take advantage of a carbon-trading market worth upwards of $1 trillion.
NRDC created and invested $66 million of its own money in a BlackRock stock fund that invested heavily in natural gas companies, and in 2014 disclosed that it had millions invested in renewable funds.
Former NRDC head, Gina McCarthey, now heads up Biden’s climate policy team, and Biden’s top economic advisor, Brian Deese, last worked at BlackRock, and almost certainly will return at the end of the Biden Administration.
Money buys influence. In 2019, McKibben called Steyer a “climate champ” when Steyer announced he was running for president, adding that Steyer’s “just-released climate policy is damned good!” And in 2020, McKibben wrote an article called, “How Banks Could Bail Us Out of the Climate Crisis,” for The New Yorker, which repeated the claim that extreme weather created by climate change threatens financial interests, and that the way to prevent it is to divert public and private money away from reliable energy sources toward weather-dependent ones.
Forms filed to the Internal Revenue Service by Steyer’s philanthropic organization, the TomKat Charitable Trust, show that it gave McKibben’s climate activist group, 350.org, $250,000 in 2012, 2014, and 2015, and may have given money to 350.org in 2013, 2016, 2017, 2018, 2019, and 2020, as well, because 350.org thanked either Steyer’s philanthropy, TomKat Foundation, or his organization, NextGen America, in each of its annual reports since 2013.
At the same time, McKibben’s motivations are plainly spiritual. He claims that various natural disasters are caused by humans, that climate change literally threatens life on Earth, and is thus “greatest challenge humans have ever faced,” a statement so unhinged from reality, considering declining deaths from disasters, declining carbon emissions, and the total absence of any science for such a claim, that it must be considered religious.
McKibben first book about climate change, The End of Nature, explicitly expressed his spiritual views, arguing that, through capitalist industrialization, humankind had lost its connection to nature. “We can no longer imagine that we are part of something larger than ourselves,” he wrote in The End of Nature. “That is what this all boils down to.” Indeed, for William James, the belief in “an unseen order” that we must adjust ourselves to, in order to avoid future punishment, is a defining feature of religion.
Climate change is punishment for our sins against nature — that’s the basic narrative pushed by journalists, climate activists, and their banker sponsors, for 30 years. It has a supernatural element: the belief that natural disasters are getting worse, killing millions, and threatening the economy, when in reality they are getting better, killing fewer, and costing less. And it offers redemption: to avoid punishment we must align our behavior with the unseen order, namely, a new economy controlled by the U.N., bankers, and climate activists. Unfortunately, as is increasingly obvious, the unseen order is parasitical and destructive.
When Nuclear Leads, the Bankers Will Follow
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Former German Chancellor Angela Merkel, French President Emanuel Macron, and U.S. Energy Secretary Jennifer Granholm
The unseen order of bankers, climate activists, and the news media is so powerful that it is difficult to imagine how it could ever be challenged.
The financial might of the climate lobby covers the wealth not only of billionaires Soros, Steyer, and Bloomberg, but also $130 trillion in investment funds, including many of the world’s largest pension funds, such as the one belonging to California public employees. The climate lobby’s political power is equally awesome, covering the entirety of the Democratic Party and a significant portion of the Republican Party, and most center-Left parties in Europe.
And all of that is sustained by cultural power, which has led many elites to view climate change as the world’s number one issue, has convinced half of all humans that climate change will make our species extinct, and has served as the apocalyptic foundation for Woke religion.
But serious cracks in the foundation are growing. The global energy crisis has revealed for many around the world the limits of unreliable renewables, with European governments having to subsidize energy to avoid public backlash, President Biden and other heads of state opening up emergency petroleum reserves, and all nations begging OPEC to produce more energy.
The blackouts and rising unreliability of electricity in California, along with the work of the pro-nuclear movement over the last 6 years, has resulted in a growing number of Democrats supporting nuclear energy. Energy Secretary Jennifer Granholm last week publicly urged California Governor Gavin Newsom not to close California’s Diablo Canyon nuclear plant, the signature nuclear plant Environmental Progress has been trying to save since 2016. Democratic support in particular for nuclear is growing.
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And alternative media including Substack, podcasts, and social media platforms are increasingly providing a counterweight to the mainstream news media, exposing a huge number of issues that the media got wrong in recent years, and amplifying alternative voices.
Nowhere is the change occurring faster than in Europe, where energy shortages are affecting heating, cooking, and electricity supplies in ways that undermine the legitimacy of the banker-led climate efforts. In Britain, private energy companies have gone bankrupt, forcing the government to bail them out. For-profit energy companies, like banks, ultimately depend on taxpayers, who are also voters.
Outgoing German Chancellor Angela Merkel, who led her nation’s exit from nuclear energy, acknowledged that Germany had been defeated in its anti-nuclear energy advocacy at the European Union level, and that nuclear would finally be recognized as low-carbon.
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And French president Emanuel Macron, under pressure from the political right as voters look to elections next year, gave a passionate speech in favor of nuclear energy last month, announcing $35 billion for new reactors.
As the world returns to nuclear, policymakers, media elites, and climate advocates will be increasingly confronted with the question of why consumers and taxpayers will benefit from a global carbon trading scheme and more weather-dependent renewables, particularly at a time of declining global emissions from the continuing transition from coal to natural gas, reduced deforestation, and increased reforestation.
Simply building more nuclear power plants means there is no climate change justification for weather-dependent renewables, which actually require greater use of natural gas, in order to deal with the high amount of unreliability.
Nuclear power goes with slow and patient capital. The obvious funders of a nuclear expansion in the West would be the pension funds, which need the secure return on investment that major construction and infrastructure projects provide, and which unreliable renewables, as the energy crisis shows, do not.
And though the news media is currently ignoring the New York Fed’s report, reporters will not be able to continue spreading misinformation about climate change indefinitely. Increasingly, they, and thus policymakers and the public, will be forced to confront facts inconvenient to their narrative, including that humans are adapting remarkably well to climate change, that renewables make energy unreliable and expensive, and that only nuclear can achieve sustainability goals of reduced emissions, material throughput, and land use.
As people ask, “How Bad Are Weather Disasters?”, not just for banks, but for all of us, the answer will increasingly come back, “Not very.”
Not for the first time, the Macdonald-Laurier Institute’s Policymaker of the Year is not a Canadian.
In 2019, our laureate was Xi Jinping, leader of the People’s Republic of China, whose long arm reached far into many aspects of policymaking in our nation’s capital.
That helps to underline our intention in conferring this recognition. Policy influence can be used to Canada’s benefit or detriment. In naming our annual Policymaker of the Year, MLI does not endorse their policies; instead, we seek to draw to the attention of Canadians those people who have had the most influence on public policy in this country – for good or ill – in the past year.
And in 2025, who can deny that US President Donald Trump, the Disruptor-in-Chief, has exercised an outsized influence on Canadians – on their hopes and fears, on their political preferences, and, most importantly for our purposes, on the policies pursued by the Canadian government?
How has Donald Trump spurred policy change in Canada? Let us count the ways:
First, set aside for the moment any focus on specific policy areas and just think about the President’s style and strategy. Anyone who has read The Art of the Deal knows that Trump is quite straightforward in avowing that his dealmaking strategy sets out to frighten and intimidate the other party with a degree of unpredictability, bravado, and unwillingness to be bound by past assumptions that is sometimes just breathtaking to contemplate.
On the other hand, what on the surface appears to his opponents as simply irrational is in fact nothing of the sort. He sets out to frighten and intimidate, but he also sets out to get deals done, which cannot happen with negotiating partners paralyzed by fear. And in fact, the list of deals he has done in less than a year in office is impressive: NATO members have made big commitments to increase defence spending, the war in Gaza is paused by a (shaky) ceasefire of his design, trade deals have been struck with many partners, including the EU, the UK, Mexico, and even China … though notably, not with Canada.
Here at home, Trump has riled Canadians with his comments about annexation and disputed borders, laid a heavy finger on the 2025 electoral scales, and met repeatedly with Prime Minister Mark Carney – but equally repeatedly sent him on his way with little to show for the Prime Minister’s efforts as supplicant. Policies that seemed settled, like our purchase of the F-35 fighter jet, our deep integration with the US economy, and our feeble attempts at even-handedness in the conflict in the Middle East, all seem to have fallen victim to Ottawa’s ill-advised urge to stick a finger in Donald Trump’s eye, whatever the cost.
Like it or not, Trump has reminded Canadians in no uncertain terms that America is the elephant and we are, if not exactly a mouse, certainly a beast whose wellbeing depends on American forbearance and good will. The question of whether we can calm the rampaging elephant and charm him into a better humour or fall back on much less profitable relations with other countries far away is THE question that will preoccupy policymakers in Ottawa this year and for several years to come.
It is against this backdrop that several major dimensions of Canada-US relations have been thrust into the spotlight – none more dramatically than trade.
Weaponized Tariffs and Fractured Trade
Tim Sargent
For many Canadians, Donald Trump’s re-election on November 5, 2024, while not a cause for celebration, was also not an existential threat to our economy. After all, when Trump was first elected in 2016, his threats to tear up the North American Free Trade Agreement (NAFTA) ultimately came to nothing, and the new version of NAFTA that was negotiated by the US, Canada, and Mexico (we call it CUSMA, the Americans call it USMCA), was broadly similar to its predecessor, with almost all Canadian goods able to enter the US market tariff-free.
That complacency was almost immediately shattered when the President, even before his inauguration, announced his intent to slap a tariff of 25 per cent on Canadian (and Mexican exports), supposedly in response to Canada’s failure to stop fentanyl from crossing over the US border. The shock was rapid, and the implications unmistakable.
Once in office, Trump made good on his threat and imposed the 25 per cent tariff on all Canadian exports except energy, which was subject to “only” a 10 per cent tariff. The sheer interconnectedness of the North American economy forced Trump to partially back down and exempt CUSMA-compliant goods from the tariffs. However, because they raised input costs for US manufacturers, Trump opened another front by slapping tariffs on steel, aluminum, autos, copper, lumber, and furniture in the name of national security, overriding the CUSMA treaty that he had signed. While these tariffs apply to all countries, these are all commodities for which Canadian exporters are very dependent on the US market, and which are very important for the Canadian economy.
While trade disputes with the US have not been unknown since the signing of the original Canada-US Free Trade Agreement in 1988 – softwood lumber is the most obvious example – no one expected Trump to take aim at the whole Canada–US trading relationship, which accounts for almost a quarter of our GDP. This escalation marks a break not just with economic norms but with decades of strategic restraint.
None of this augers well for the negotiations for the renewal of CUSMA, which are supposed to conclude in the summer of 2026, or the broader Canada-US trading relationship. Indeed, it is not clear that the renewal document will be worth the paper it is written on, given that Trump has shown no compunction in violating the terms of the original agreement. Perhaps even more fundamentally, the President, reflecting a broader strand of America-first nationalism, simply does not see trade as a mutually beneficial activity; rather, it is a zero-sum game in which the only way for the US to win is for others to lose. The fact that basic economics says the opposite seems to be neither here nor there.
All this leaves Canadian policymakers with some unpleasant alternatives. While the Carney government originally attempted to retaliate by imposing tariffs of its own, the reality is that these are pinpricks to the US, for which Canadian exports are only a few percentage points of GDP. Furthermore, tariffs hurt Canadian consumers. The other alternative, which the government is now pursuing, is to diversify Canada’s trade away from the US. However, Canadian governments have been trying to reduce their reliance on the United States since at least the 1970s, with little success. Geography and economic gravity continue to dominate: the US will always be the most obvious market for our exports, even with tariffs.
Perhaps the most that Canadians can hope for is that Americans will, as has happened in the past, come to realize that a close and stable trading relationship with Canada is in their national interest just as much as it is in ours.
Trade Tensions Fuel Canadian Oil Revival
Heather Exner-Pirot
Donald Trump’s tariffs and threat to the Canadian economy have meaningfully shifted both the public understanding and attitude towards oil and gas. Perhaps in the past it could be seen simply as something Alberta produced, an embarrassing source of global emissions. After 2025, it became clear how essential oil production is both to our economic health and our global standing.
Oil is Canada’s largest export, and most of it goes to the United States. When Trump declared in January 2025 that “we don’t need their oil and gas. We have more than anybody,” it was a tell. Canadian oil and gas is precisely the thing we produce that the United States needs more than anything else. In fact, that same month the US imported a record amount of Canadian crude oil: 4.27 million barrels; the most any country has ever imported from another in the history of the world.
This newfound appreciation of oil and its geopolitical importance brought a long-dead idea back to life: an oil pipeline to the northwest coast of British Columbia, the value of which has always been in diversifying our market for heavy oil from the US to Asia. The source of hard fought culture wars in the 2010s before being approved in 2014, rejected by Trudeau in 2018, and handed the final indignity of a tanker ban in 2019, a Northern Gateway-type pipeline is now not only possible, but even likely. In every public opinion poll in 2025, such a pipeline has enjoyed majority support. It is the centrepiece of the landmark MOU between the federal and Alberta government that has as an explicit goal increasing oil and gas production.
Canada has always had the resources of an energy superpower. Trump’s threats have done more to give us the ambition of one than anyone or anything before him.
“Elbows up” and the New Anti-American Nationalism
Mark Reid
Donald Trump’s return to the White House drastically altered the course of Canadian politics. The ensuing fallout – fuelled by threats of tariffs and incendiary “51st state” rhetoric – became the key catalyst that propelled Mark Carney’s Liberals to victory on an “elbows up” platform.
This resurgent Canadian nationalism was defined by a sharp strain of anti-Americanism in general, and a profound dislike of Trump in particular.
As Trump slapped tariffs on Canada (and mused about annexing Greenland), the Prime Minister and provincial leaders promised a “Team Canada” approach to counter the President’s aggression. Canadian politicians from coast to coast earnestly vowed to remove interprovincial trade barriers, back major national projects, and present a common front.
That unity quickly faded.
Faced with new rounds of tariff threats, Carney’s government shifted to diplomatic conciliation, rolling back the Digital Sales Tax and offering border security concessions to avert economic disaster. Supporters called it pragmatism; critics called it a surrender.
Meanwhile, the Team Canada vision turned out to be a mirage. Interprovincial squabbles over a bitumen pipeline to tidewater in BC persists, while a multi-million-dollar Ontario anti-tariff ad, which aired on US television, infuriated Trump.
These internal divisions underscore a dangerous reality: Canada’s very sovereignty may be at risk. The US President’s recent “Trump Corollary” to the Monroe Doctrine clearly articulates his vision of American hegemony over the Americas, with Canada, presumably, as a sort of vassal state. The federal government now faces an impossible task – buying time in the hope that the US political climate shifts, while protecting Canadian autonomy from an American president who sees it as negotiable.
Smashing the Overton Window on social policy
Peter Copeland
Donald Trump is polarizing for good reason. He is rude, crude, lewd, and norm-breaking to an extraordinary degree: a former Manhattan Democrat and social liberal whose transgressiveness and contempt for precedent embody many of the very cultural tendencies the left has long celebrated. His impulsiveness seems to threaten alliances and raise geopolitical risks by the day – yet he now leads the most effective conservative movement in decades.
He also possesses unusual strengths. His entrepreneurial instinct has allowed him to see the gap created by an oblivious, or unwilling, left- and right- establishment political class on trade, immigration, cultural and social decline – and to seize the opportunity. His unfiltered political style contrasts sharply with the scripted, risk-averse habits of career politicians and the professional-managerial class. He seeks no validation from the Davos set or the media-academic establishment, making him unafraid to challenge orthodoxy. Trump’s rise is a sharp indictment of liberal elites on both sides of the political spectrum, who proved incapable of addressing the deep social and economic issues that he foregrounded from the outset of his presidency.
On issues like gender identity, DEI, and mass migration, rooted in an extreme open-society ideology of hyper-individualism and autonomy, establishment leaders had long been unwilling even to acknowledge the problems. Then Trump came along and threw open the Overton window on just about every issue.
For Canada, Trump’s impact is mixed. He expanded the envelope of the politically possible on topics thought untouchable just years ago, but his abrasive style has made Canadian elites – whose defining characteristic is anti-Americanism – more reluctant to pursue parallel reforms. On immigration, borders and defence, Ottawa is now moving; on gender, DEI, and education, it is retreating behind “Trump did it, so we won’t.”
Shredding Canada’s US security blanket
Richard Shimooka
President Trump’s successful upending of American foreign policy in 2025 has had profound and potentially long-term consequences, but few are as acutely felt as the changes he has forced upon the Canada-US security relationship. Trump’s actions have effectively ended the decades-long expectation that the United States would forever underwrite Canada’s defence and security, forcing a sea-change in Ottawa’s strategic calculus.
Since the Second World War, the foundation of the Canada-US security and economic relationship has been an interlocking system of security guarantees through alliances and free trade blocs. This synergistic mix, which bound states like Canada to a rules and values based international order conceived in Washington, allowed Canada to maintain a relatively small defence footprint, relying instead on overwhelming American firepower to deter its enemies.
However, Trump’s skepticism towards this foundation, evident since his first term, consolidated into decisive policy changes in his second term. By launching a devastatingly counterproductive trade war against Canada and other major trading partners and directly questioning the value of major alliances like NATO, he effectively declared America’s security commitments are no longer unconditional.
For Canada, this has meant a new urgency to foot a larger portion of the bill for continental security, a renewed focus on securing both the Canada-US border and the Arctic, and for finally meeting long-standing pledges to spend two per cent of GDP on NATO.
Ironically, while Trump’s pressure tactics have succeeding in pushing Canada (and other allies like Japan and Germany) to increase defence spending and become more self-sufficient, it comes at the cost of America’s ability to lead like-minded states. As US leverage wanes, Trump’s strategy may end up pushing America’s allies into the arms of strategic rivals like China.
Without American global leadership, states may prioritize a narrower brand of self-interest – one that is counterproductive to America’s overall strategic ends. Observe how Canada is now looking to rebuild its economic relationship with the People’s Republic of China, not merely for trade, but as a deliberate economic counterweight to its highly integrated trade relationship with the United States.
This impulse will likely be shared by many US allies. Indeed, allied nations in Southeast Asia may begin to doubt Washington’s commitment to the current geopolitical alignment and seek to balance their relationship with China. Some may even fall further into Beijing’s grasp, becoming the 21st-century equivalent of tributary states.
“Trump the Peacemaker” and the Politics of Force
Casey Babb
Donald Trump’s bold and fearless foreign policy decisions – especially regarding Israel’s war in Gaza and the broader Middle East – make him one of the most consequential and transformative political leaders in a generation. His combination of disruption, recalibration, and strategic risk-taking sought to redirect the trajectory of the Middle East in ways few leaders have attempted.
Some of these changes began during Trump’s first administration. The Abraham Accords, which normalized relations between Israel and several Arab states, reflected a shift toward open regional co-operation against shared security concerns. His decisions, like recognizing Jerusalem as Israel’s capital and cutting aid to Palestinian institutions, were commonsense corrections to what he viewed as unnecessary diplomatic ambiguities.
However, his most transformative actions in the Middle East happened in the aftermath of the October 7, 2023, Hamas terror attacks on Israel. From his 20-point plan for peace in Gaza and his efforts to bring home hostages, to the “12 Day War” between Israel and Iran, Trump made it clear that America’s support for Israel remains unwavering – signalling that Washington is willing to take decisive action in the Middle East to protect US and allied security.
Beyond the Middle East, Trump’s approach to China marked a sharp departure from previous presidents. Replacing engagement tactics with tariffs, export controls, and the framing of China as a key rival, Trump pushed for a shift in US policy that continues in his second term in office.
In Europe, Trump’s record on the Russia-Ukraine war is mixed. The President has pressured NATO allies to carry a greater load in terms of supporting Ukraine, and the US has continued to provide Kyiv with lethal military aid. However, critics worry about Trump’s personal relationship with Russian President Vladimir Putin: as the peace negotiations continue, will Ukraine eventually be sacrificed for American expediency?
Conclusion
Trump’s legacy remains unwritten. It may destabilize Western institutions, or it may be the jolt needed to shake a complacent boomer establishment out of its decadent, dogmatic slumbers.
Trump has clearly shifted the geopolitical landscape in both Canada and around the world – in ways no conventional figure could have. It is worth asking: would Europe have increased defence spending without American pressure? Would Canada have taken border security, immigration, defence, or energy policy seriously?
Even conservative governments – often differing little from liberal ones in practice – have lacked the capital or resolve to confront entrenched bureaucracies, and it remains doubtful whether any old-school Canadian libertarian-oriented fusionist, or a typical Wall Street Republican in the US, would have had what it took to win, yet alone enact the needed the reforms.
Trump was, and is, very much the man for the moment. Whether this shift leads to renewal or decline, only time will tell. Those same disruptive instincts have defined his approach to the world stage as well, reshaping geopolitics in ways Canadians cannot ignore.
Brian Lee Crowley is managing director of the Macdonald-Laurier Institute.
Tim Sargent is a senior fellow and the director of Domestic Policy at MLI.
Heather Exner-Pirot is a senior fellow and MLI’s director of Energy, Natural Resources, and the Environment.
Mark Reid is the senior editor at MLI.
Peter Copeland is the deputy director of Domestic Policy at MLI.
Richard Shimooka is a senior fellow at MLI.
Casey Babb is the director of MLI’s The Promised Land program.
From Resource Works
By Geoff Russ
Compared to last December, Canadians are paying far more attention.
Canada’s energy conversation has changed in a year, not by becoming gentler, but by becoming real. In late 2024, pipelines were still treated as symbols, and most people tuned out. By December 2025, Canadians are arguing about tolls, tariffs, tanker law, carbon pricing, and Indigenous equity in the same breath, because those details now ultimately decide what gets built and what stays in the binder. Prime Minister Mark Carney has gone from a green bureaucrat to an ostensible backer of another pipeline from Alberta to the West Coast.
From hypothetical to live instrument
The pivot began when the Trans Mountain expansion started operating in May 2024, tripling capacity from Alberta to the B.C. coast. The project’s C$34 billion price tag, and the question of who absorbs the overrun, forced a more adult debate than the old slogans ever allowed. With more barrels moving and new Asian cargoes becoming routine, the line stopped being hypothetical and became a live economic instrument, complete with uncomfortable arithmetic about costs, revenues, and taxpayer exposure.
The American election cycle then poured gasoline on the discussion. Talk in Washington about resurrecting Keystone XL, alongside President-elect Donald Trump’s threats of 25 percent tariffs, reminded Canadians how quickly market access can be turned into leverage.
In that context, Trans Mountain is being discussed not just as infrastructure, but as an emergency outlet if U.S. refiners start pricing in new levies.
The world keeps building
Against that backdrop, the world kept building. Global pipeline planning has not paused for Canadian anxieties, with more than 233,000 kilometres of large diameter oil and gas lines announced or advancing for 2024 to 2030. The claim that blocking Canadian projects keeps fossil fuels in the ground sounds thinner when other jurisdictions are plainly racing ahead.
The biggest shift, though, is domestic. Ottawa and Alberta signed a memorandum of understanding in late November 2025 that sketches conditions for a potential new oil pipeline to the West Coast, alongside a strengthened industrial carbon price and a Pathways Alliance carbon capture requirement. One Financial Post column argued the northwest coast fight may be a diversion, because cheaper capacity additions are on the table. Another argued the MOU is effectively a set of investment killers, because tanker ban changes, Indigenous co ownership, B.C. engagement, and CCUS preconditions create multiple points of failure.
This is where Margareta Dovgal deserves credit. Writing about the Commons vote where Conservatives tabled a motion echoing the Liberals’ own MOU language, she captured the new mood. Canadians are no longer impressed by politicians who talk like builders and vote like blockers. Symbolic yeses and procedural noes are now obvious, and voters are keeping score.
Skills for a new era
The same sharper attention is landing on carbon capture, once a technocratic sidebar. Under the MOU, a new bitumen corridor is tied to Pathways Alliance scale carbon management, and that linkage is already shaping labour planning. A Calgary based training initiative backed by federal funding aims to prepare more than 1,000 workers for carbon capture and storage roles, a sign that contested policy is producing concrete demand for skills.
British Columbia is no longer watching from the bleachers. It flared again at Carney’s December 18 virtual meeting, after Environment Minister Steven Guilbeault resigned from cabinet over it. Premier David Eby has attacked the Alberta Ottawa agreement as unacceptable, and Prime Minister Mark Carney has been forced into talks with premiers amid trade uncertainty. Polling suggests the public mood is shifting, too, with a slim majority of Canadians, and of British Columbians, saying they would support a new Alberta to West Coast pipeline even if the B.C. government opposed it, and similar support for lifting the tanker ban.
None of this guarantees a new line, or even an expanded one. But compared with last year’s tired trench warfare, the argument now has stakes, participants, and facts. Canadians have woken up to the reality that energy policy is not a culture war accessory. It is industrial policy, trade policy, and national unity policy, all at once.
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