Prime Minister Mark Carney addresses the European Parliament in Strasbourg, France, on Sept. 17.Justin Tang/The Canadian Press
Prime Minister Mark Carney made the case to the European Union on Thursday that it should forge a stronger partnership with Canada. The fact that Canada’s trade deal with the EU hasn’t been fully ratified almost a decade after it was signed shows that despite good intentions, boosting the relationship won’t be easy.
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) entered into force provisionally in 2017, bringing in zero or low-duty trade between Canada and the EU and eliminating various trade barriers. However, 10 of the 27 member countries still haven’t ratified the deal.
Political parties of various stripes in France, Italy, Poland and other countries expressed fears about the impact on agriculture and worried investor-state dispute settlement provisions would disempower national governments. As a result, these investment provisions have yet to come into effect between Canada and the EU.
The lack of clear dispute mechanisms raises risks for companies, and has served as a drag on bilateral investment. In order for Canadian companies to feel more comfortable investing in the EU, and for Europeans to put more capital towards Canadian mining, energy and infrastructure projects, full ratification is needed.
Another deal between Canada and the EU, the Strategic Partnership Agreement, which focuses on security, climate change and other issues, also hasn’t been fully ratified. Hopefully, Mr. Carney’s push for closer relations will spur a full ratification of both agreements.
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The term used by the European Commission President Ursula von der Leyen to describe a potential new relationship between the bloc and Canada – “associate membership” – may give the impression of a sea change, but any deal would be more subtle, an evolution.
Full integration isn’t on the table, as it would require Canada to follow EU laws and regulations without getting to vote on them. Canadians fantasizing about moving to a chic apartment on the Seine shouldn’t get too excited either.
Given immigration sensitivities on both sides of the Atlantic, any loosening of visa rules would be limited. Possible benefits could exclude expanded opportunities for young Canadians to work and study abroad, such as potential access to Europe’s coveted Erasmus+ exchange programs.
The impacts of a potential deal are likely to be focused on certain sectors that Mr. Carney already had his eye on. Deeper collaboration on defence industries, critical minerals, artificial intelligence and technology would be valuable for both partners.
Even with hurdles cleared, there are limits to how far trade with the EU can grow. Canadian business leaders used to working in the U.S. will have to navigate linguistic differences, new regulations and longer distances.
CETA has had some success in boosting trade with the EU. Canada’s merchandise exports to the EU rose from $23.9-billion in 2017 to $42.8-billion in 2025. Canada’s service exports to the EU went from $13.3-billion to $25.3-billion over the same time period. However, as a share of total value of Canada’s trade, exports to the EU remain small – it was 4.4 per cent in 2017, and increased to just 5.5 per cent in 2025.
Full ratification of CETA, which would bring a transparent investor dispute framework for both sides, would boost the economic relationship, says Crina Viju-Miljusevic, an associate professor in European studies at Carleton University.
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Like CETA, any new deal would likely include provisions agreed to by the EU, as well as those requiring ratification from national governments. While Europe is also looking to beef up its trade relationships to reduce reliance on the U.S., the rise of populist parties suspicious of foreign partners makes full endorsement uncertain.
There is no magic solution to eliminate Canada’s pain resulting from the damaged relationship with its southern neighbour, which will remain an important trading partner. A stronger relationship with Europe will help, eventually. Continued outreach to Middle Eastern and Asian economies, will also help, eventually.
If Mr. Carney’s ambitions to bolster Canada’s homegrown economy by developing resource projects and infrastructure, such as a new oil pipeline, are fulfilled, that will also help, eventually. A deal with Europe won’t save Canada, but taken together, these steps will help Canada maintain its independence and build a more resilient economy.