Prime Minister

Mark Carney

declared at Davos that recent assertive actions by the globe’s “great powers” have diminished the sovereignty of “middle powers,” thereby “rupturing” historical geopolitical relationships and creating a “new world order.”

This dynamic is not new — it simply marks the latest example of the geopolitical golden rule: He who has the gold makes the rules.

The

United States

has led the world economically for more than 100 years. Remarkably, after more than a century, its economic outperformance is accelerating. At Davos, U.S. Treasury Secretary Scott Bessent boasted that U.S.

gross domestic product

(GDP) grew 4.4 per cent over the past year, compared to 1.3 per cent for other

North Atlantic Treaty Organization

members.

With U.S. economic growth at close to three times that of the middle powers, no wonder U.S. President

Donald Trump

feels emboldened to make demands.

For Canada, our economic struggles (GDP per capita has been near zero for the past decade) threaten our sovereignty

and

strain our national unity. A prime example is the current debate in Western Canada on the fairness of the federal equalization payment formula. Only when the economic pie is shrinking do you start fighting over the pieces.

Carney’s proposed solution to the challenge of the new world order is two-fold.

First, diversify away from the U.S. by forming new alliances with other countries. This is no doubt a worthy long-term goal, but it can take a long time to develop new markets for Canadian products. Even for global commodities such as oil and natural gas with built-in customer bases, Canada’s current regulatory process has proven to be an impediment to attracting private sector capital.

Carney’s second solution is for Canada to strengthen its own economy. In his Davos speech, he said, “We are no longer relying on just the strength of our values, but also on the value of our strength.” To make Canada’s economy stronger, he identified cutting taxes, removing federal barriers to internal trade and regulatory reform to fast-track projects.

Being regulatory competitive with the U.S. is what inspired the CEOs of the largest Canadian energy companies to create the Build Canada Now initiative in January 2025 and write an open letter outlining six regulatory reforms to make this country’s energy sector more competitive with the U.S.

Five of the six reforms were incorporated into the memorandum of understanding (MOU) announced in November between the federal and Alberta governments to advance a pipeline to the British Columbia coast. These included addressing B.C.’s coastal tanker ban, eliminating the hard cap on emissions, streamlining the environmental impact assessment process for projects, delegating the industrial carbon tax to the provinces and ensuring Indigenous participation in projects.

Build Canada Now’s sixth recommended regulatory reform was a six-month deadline for project approvals. Carney responded in June with the Building Canada Act, setting a deadline for project approvals of two years.

Build Canada Now’s six-month recommendation for project approvals was not arbitrary; it was seen to be competitive with the U.S. for major project approvals at the time. Unfortunately for Canada, the U.S. has not been standing still and has sought to further streamline its regulatory process since then. In April 2025, it enacted the National Energy Emergency Act that shortened the regulatory approval deadline to 28 days.

The U.S. continually moving the regulatory approval goalposts is forcing middle powers into a race to further deregulate their own economies. Also at Davos, German Chancellor Friedrich Merz said, “We have become the world champion of over-regulation. This has to end. Security and predictability take precedent over excessive regulation and misplaced perfection. We must reduce bureaucracy in Europe.”

Consequently, for Canada to be competitive with the U.S. (and soon Europe), we must now shorten our own regulatory approvals to three months from two years. While this is still three times longer than the U.S., this timeframe will allow Canada to incorporate Indigenous consultation, which is not required in the U.S.

Canada cannot control the geopolitical whims of the great powers. What it can control is its own regulatory environment. Canada’s regulatory approval process for major projects is currently 24 times longer than the U.S., putting us at a significant disadvantage in the coming fight.

In hockey parlance, Canadian industry is currently only permitted to get its “elbows up” 23 months after the U.S. drops the gloves, giving our opponent plenty of time to land an upper cut.

Shortening the time frame to approve projects to three months would be a dramatic demonstration that Canada is repositioning itself to move from being a weak to a super middle power. This transformation will help to ensure both Canada’s sovereignty and national unity.

As Carney said in his address to the nation from Quebec on Thursday, “Now we must execute. Fairly and fast.”

  • Terence Corcoran: Why Canada will eventually join the United States
  • Jack Mintz: Neither Trump’s nor Carney’s new world order will last

Adam Waterous is chief executive of Waterous Energy Fund.