Carney leads middle power coalition drive as CANZUK gains traction

Energy giant Canada has emerged as the leading driver of efforts to build a formal middle-power coalition among like-minded Commonwealth nations, with Prime Minister Mark Carney using his first year in office to push the long-dormant CANZUK concept and a broader variable-geometry foreign policy doctrine as the US ramps up efforts to weaken the Canadian economy. 

Carney's January speech at the World Economic Forum in Davos, titled "Principled and Pragmatic: Canada's Path", declared that the international order had suffered "a rupture, not a transition" and called on middle powers to cooperate rather than accept subordination to great powers. His line that "middle powers must act together because if we're not at the table, we're on the menu" has since been repeated by advocates of closer ties between Canada, Australia, New Zealand and the United Kingdom.

The shocking speech drew an unusual standing ovation at Davos and was followed by a sharp response from US President Donald Trump, who rescinded an invitation for Canada to join his Board of Peace and threatened 100% tariffs on Ottawa unless it abandoned a planned trade deal with China.

Canada has since followed up with concrete diplomatic activity. Carney has completed a week-long mission to India, Australia and Japan and has hosted 18 nations in Montreal to define the governance of a proposed Defence, Security and Resilience Bank, modelled on the World Bank but aimed at mobilising private capital for collective security among like-minded partners.

Canada has become the first non-European country to join the European Union's Security Action for Europe programme. Joint exercises with South Korea, Japan, Australia and the Philippines have been stepped up, alongside closer defence cooperation with the UK and Nordic states.

The harder edge of Carney's foreign policy has been backed by a defence spending commitment to hit NATO's 2% of GDP target this year and reach 5% by 2035, marking the largest Canadian strategic reset since the early Cold War. Major procurement programmes under consideration include 12 submarines from South Korea's Hanwha Ocean or Germany's ThyssenKrupp, 88 fighter jets, Australian-supplied over-the-horizon radar and 15 Canadian-built destroyers.

The CANZUK proposal fits into this wider architecture. Advocates argue the four countries share Westminster parliamentary systems, common-law traditions and King Charles III as head of state, providing a natural basis for deeper trade, mobility and security ties. Australia and New Zealand already operate something close to the proposed arrangement, with free movement, work rights, healthcare access and domestic university fees for each other's citizens.

A full CANZUK framework would extend this to the UK and Canada, removing tariffs, recognising professional qualifications and allowing engineers, doctors, teachers and lawyers to practice across the four countries without additional accreditation. The combined population would reach around 135mn, with significant natural resource endowments concentrated in Australia and Canada.

Support for the CANZUK proposal has come from Canadian opposition leader Pierre Poilievre and former UK Cabinet minister Tom Tugendhat, who argued that the geographic separation of the four countries would be an advantage rather than a constraint. The Australian Institute of International Affairs has proposed a plurilateral agreement among the four countries modelled on the dormant Indo-Pacific Economic Framework.

Not all reaction has been positive. The Council on Foreign Relations has argued that a formal middle power club would make the world more dangerous by accelerating the break-up of the liberal international order. Analysts have also noted that Carney's own outreach to China, including a "canola for electric vehicles" deal, risks undermining coalition discipline.

Carney has committed to both a foreign policy review and a national security strategy built around what he has called "values-based realism" in a world of "variable geometry", meaning different coalitions for different issues. However, Global Affairs Canada is facing a 20% budget cut, from CAD9.05bn ($6.46bn) in 2025-26 to CAD7.22bn ($5.15bn) in 2026-27, prompting criticism from former diplomats who argue the department is being hollowed out just as Canada's international ambitions expand.

Australia and the UK remain comparatively cautious, with analysts describing current governments in Canberra and London as preferring to ride out global conditions rather than reshape them. Canada's role as the driver of the agenda reflects both the acute pressure Ottawa faces from the Trump administration, which has imposed sectoral tariffs on Canadian steel, aluminium and lumber, and Carney's personal track record as a former Bank of Canada and Bank of England governor with extensive networks in London.