The current moment is rooted in shifting ideas, characterized by the rise and fall of globalization, said Sean Speer, editor-at-large at the Hub and a practitioner-in-residence and fellow at the Public Policy Forum, in the opening keynote at the Canadian Investment Review’s 2025 Investment Innovation Conference.
The stagflation of the 1970s, the elections of Margaret Thatcher and Ronald Reagan in 1970 and 1980, respectively, and the end of the Cold War were moments that ushered in greater global economic integration and cooperation, he said. Though he also highlighted the Royal Commission, which was established in the early 1980s to investigate big developments around Canada’s economy and geopolitics.
“It was a moment of rising U.S. protectionism and a lot of other threads that look and sound pretty similar to the conditions we find ourselves in today.”
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Among the key recommendations of the commission was Canada pursuing free trade with the U.S., which became the basis for the 1988 Free Trade Agreement, said Speer, noting it was a catalyst for hundreds of free trade agreements all over the world. It also resulted in a massive rise in trade as a share of the economy, with the Canada-U.S. trade relationship currently standing at more than a trillion dollars a year and global trade levels almost doubling since the early 1980s.
While the conversation around globalization often focuses on goods and capital, it’s important not to underestimate the significance of globalization as it applies to the free flow of people, he said, noting annual migration flows were north of 300 million in 2024, essentially doubling global flows in 1990.
These trends are important to understanding the rise of populism and the growing anti-globalization politics of today, said Speer, pointing to the China “shock” — the effect of rising competition and import penetration from China — and the global financial crisis of 2008/09.
“The net effect of all of these trends is that we’ve gone from the pro-globalization consensus . . . to a new centre of gravity in American politics that’s inherently anti-globalization.”
There’s a tendency to attribute the rise in anti-globalization in the U.S. to President Donald Trump, he said, cautioning that’s the wrong way to think of it. Instead, he believes U.S. administrations will be more protectionist for the foreseeable future, “more nakedly self-interested in its relationships with allies around the world, more transactional and, ultimately, less reliable [on global] markets for all forms of exports, including capital.”
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In terms of tariffs, whatever deal Canada ends up with may be the new norm, said Speer, which is clearly bad news for Canada, a country that relies disproportionately on trade, with exports representing about a third of the national economy.
In terms of responding to these trends, one idea is economic nationalism, he said, suggesting any steps from Canada should involve a radical agenda of greater economic competitiveness, with the government responding to protect capital production and talent.
“It’s not sufficient for Canadian tax rates to broadly match the U.S. I think we need to be markedly more competitive, to try to offset the incentives inherent to a world in which Canadian exports continue to face American tariffs on a sustained basis.”
That will require lower and flatter personal income tax rates, as well as radical corporate tax rates like the model used in Ireland, said Speer, as well as a change in the way Canada taxes capital to encourage people to want to invest, build and live here.
In addition, he recommended policymakers spend more time and great attention to entrepreneurship and business formation, making Canada attractive when it comes to domiciling, creating a business, investing in a business or working.
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“If we can create more value here in Canada through market forces, it will enable us to head off some of the inevitable harms that come from the broader changes in global trade, global investment and globalization more broadly.
“We need a much higher level of ambition and, if I can even use the phrase, radical thinking, to protect Canada’s economy, to protect Canada’s prosperity and enable businesses and investors to continue to create value for the country,” he added.
Read more coverage from the 2025 Investment Innovation Conference.