What Was Missing in the Davos Speech

Prime Minister Carney and the Power to Stop Pretending

Prime Minister Carney delivered a very good speech this week in Davos and Canadians should be proud of it. His speech was well received at home and abroad for both its content and its measured delivery. I know this personally because I have heard from friends from inside and outside of Canada. In fact, I was in Mexico for a few days of vacation when he gave the speech and Canadians were bringing it up to me at the resort including an NDP MP who happened to be there. I sincerely hope Canadians and our allies take the time to listen to the speech and its message of self-reliance and middle power collaboration.

With this complimentary introduction setting the constructive tone I want for this essay, I believe it is also important to note what was missing from the speech. What the Prime Minister did not say is that Canada is woefully unprepared to respond to the challenges from the rupture he described and the government he leads and his own advocacy as a global opinion leader bear a degree of responsibility for that. I say this as someone who has been quite complimentary of the Carney’s government’s early moves to put the country on a more solid footing from a sovereign capability, economic and national defence perspective, so my intention is not to be unfairly partisan. I think it is important for everyone to recognize that we are more vulnerable for the world as it is today because of poor decisions that have been made over the last decade.

With great respect to the Prime Minister, Canada was not, as he suggested in the speech, “amongst the first to hear the wake-up call” and change “our strategic posture” as a country. When it comes to trade realignment, defence spending and the Arctic, Canada was one of the last countries to change its posture. Had the Prime Minister acknowledged this fact even to a small degree in his speech, I think it would have been a far more powerful message than it already was. Humility can often go a long way. It might also make it easier to engage more Canadians in the truly national and bipartisan response we need as a country to build up our capability to respond to this new world.

The “rupture” of the international, rules-based order did not just happen in the months leading up to Davos or following the second inauguration of President Trump as some might suggest. This rupture has been happening over the last decade when too many politicians and opinion leaders in the western world - including Mark Carney - were expending their political and personal capital on other issues despite the cracks and fissures to the global order happening all around them. The Prime Minister and many of the attendees of the World Economic Forum were “pretending” - to use his language - for far too long and are now in the midst of a rapid course correction.

The powerful have their power. But we have something too: the capacity to stop pretending, to name realities, to build our strength at home and to act together.

That is Canada’s path. We choose it openly and confidently, and it is a path wide open to any country willing to take it with us.

- Prime Minister Mark Carney, January 20, 2026

Tragedy of the Progressive Horizon

Before this speech at Davos, Mark Carney was best known for a speech he delivered in 2015 as the Governor of the Bank of England. The speech, known as the Tragedy of the Horizon¹, was delivered at Lloyd’s of London and focused on climate finance and how the short-term nature of financial reporting for the capital markets made it difficult to address serious problems like climate change given that they were way down the road ‘on the horizon’. The tragedy came from the fact that there were incentives for policy makers and financial markets to ignore long-term risks of issues like global warming in favour of short term measures that would be rewarded by the markets. This message to insurance executives was a perfect framing of the major challenge they were facing. Insurers and re-insurers were struggling to respond to more frequent extreme weather events and the financial pressures caused by more claims related to climate change.

Climate change is the Tragedy of the Horizon. We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no direct incentive to fix…

In other words, once climate change becomes a defining issue for financial stability, it may already be too late.

- Mark Carney, September 29, 2015

Over the last decade, however, I would argue that there was another Tragedy of the Horizon, but this time in almost the reverse fashion. Too many western politicians and global thought leaders - like Mark Carney - focused their attention almost exclusively on progressive issues that served as aspirational destinations on the horizon while ignoring the immediate geopolitical risks happening all around them. The global order was steadily breaking down since the mid-2010s and creating risks to our security and our prosperity, but the government was instead crafting the social justice focused “fiction agreeable” (good story) that the Prime Minister mentioned in his speech. There was a feel-good element to this exercise that placed immeasurable and emotionally charged topics ahead of the greater risks that were breaking down the post-World War II order.

Climate Change Action — Canada’s Feminist Foreign Policy

The Progressive Trade Agenda — Hashtag Diplomacy

In the last decade, the Liberal government had a never-ending focus on the hyper-progressive elements of their brand that they used at home and abroad. They would also be used as wedge politics cudgels against any voices that brought up the realpolitik of global events. In many ways, these hyper-progressive branding elements were better examples of the Václav Havel-inspired signs in the shopkeeper window that the Prime Minister referenced in his speech.

This was my firsthand experience as an opposition MP because any time you disagreed with the progressive signs in the shop window - and many Conservatives like myself did - you were attacked as being out of step with the world. You were called a climate change denier or a misogynist or sometimes just a bad person. The tribalism of social media - also growing in prominence in this period - made it much worse and laid the foundation for the polarization we are experiencing today. Perhaps I am still a little bitter from this period and disappointed in my inability to get people to take other policy prescriptions seriously, but the fact that Prime Minister Carney has spent the first few months jettisoning many of these progressive branding elements of the Trudeau government is evidence of their misplaced priorities. That is the true tragedy of our vulnerability at this moment. The government made a conscious decision to prioritize aspirational initiatives that were more horizon type issues rather than responding to the rupture that was well underway.

Another proof point of misplaced priorities was the fact that the Prime Minister’s speech in Davos made no mention of action on climate change. It was not even referenced apart from an oblique mention of “sustainability”. This is revealing because the last time Mark Carney spoke at Davos prior to this big speech was in 2023 in his role as UN Special Envoy for Climate Finance². The fact that he did not mention a climate plan as being central to the middle powers response to the rupture the world order says a lot.

The government that Mark Carney took over as Liberal leader had spent most of its political capital on ‘climate change action’, which included policies like those in Bill C-69 that were intended to reduce the role of the energy sector in the Canadian economy. At times, the Prime Minister and members of his caucus even spoke of the need to phase out the oil and gas sector. Justin Trudeau used his first appearance at Davos as Prime Minister to subtly mock the “energy superpower” policy focus of his predecessor Prime Minister Stephen Harper. In his speech that focused on innovation he wryly stated that Canada was “resourceful” now and not just focused on natural resources. Not only did this start to grow tensions in the western part of the country, but it left us economically vulnerable to the changing world around us.

The government’s hyper-focus on climate change was happening at the same time that our manufacturing economy was becoming increasingly more vulnerable to the imposition of tariffs by the Americans starting in the first Trump administration. It was also happening at the same time that our intangibles economy was falling further behind the Americans who were re-writing global rules regarding data and intellectual property. Add to this the fact that China was aggressively using their own state-led economy - and its state owned enterprises - to compete aggressively with western countries with a goal to undermine their capacity in critical sectors. For Canada, the energy sector should have been the stabilizing feature of the Canadian economy and the surest path to maintaining our prosperity and our independence through uncertain times. The fact that Mark Carney has picked back up the “energy superpower” tagline for Canada that Stephen Harper had once used is yet another example of the course correction that is underway that the Prime Minister needs to properly acknowledge.

Security Realignment

Many western leaders were also ignoring the troubling patterns of aggression by global powers in the mid to late 2010s. Countries began to challenge the global security order and violate international law and gauge how the west would respond. It was in 2014 that Russian President Vladimir Putin began to dominate and invade his near abroad starting with the illegal occupation and annexation of Crimea. He then quickly began a multi-year insurgency operation in the Donbas region of Ukraine. This campaign of hostile aggression even included the shooting down of Malaysia Airlines Flight 17 killing 298 innocent civilians (including 1 Canadian). All of this led to a relatively muted international response. Hashtags and tough talk was all that Russia faced from countries like Canada, which only paved the way for more aggressive action a few years later with the full invasion of Ukraine in 2022.

It was between 2013 and 2020 when China began its aggressive march in its near abroad starting with a massive construction plan to build artificial islands in the South China Sea. Islands were constructed on rocky outcroppings in the international seaway that sees almost a quarter of global trade transit through its waters. Beijing also set in motion a plan to end the ‘one country, two systems’ policy for Hong Kong. In 2015, Beijing began to kidnap or illegally extradite book sellers in Hong Kong who had been selling books that were critical of the communist regime. The aggressive action of Beijing progressed beyond the book stores in the subsequent years with greater intrusions into legislative rights, press freedom, judicial independence all the way to the National Security Law of 2020 that effectively eliminated the unique rights of Hong Kongers guaranteed in the handover from the United Kingdom in 1997. With Hong Kong now under complete control and a dominant military presence across the South China Sea, the risks of a possible invasion of Taiwan and further dominance in the region has escalated. Again, this all happened while most voices in the west just sat back and watched.

Our allies also noticed that Canada had other priorities. The Trudeau government sent one of the largest delegations to the Paris climate change conference as a signal of their prioritization of climate change, but they also started out with a stated desire to warm relations with Russia and forge deeper ties with China. Not only was Canada ignoring the rupture of the rules-based order, but the government was initially trying to grow relations with two of the main belligerents. The Prime Minister later skipped a leaders meeting related to trade talks that were serving as the counter-balance to China in the Asia-Pacific, but insisted on inserting the word “Progressive” into the name of the deal . A prime example of the sign in the shop window.

The Trudeau government also ignored the trade and security concerns of our largest trading partner and ally, and particularly their concerns about strategic competition with China. This began with the Obama administration, so it cannot be explained away as being part of tensions with Trump. The government thought it was possible for Canada to still benefit from being part of ‘Fortress North America’ while also exploring free trade agreements with America’s global rival. President Obama also directly asked Canada to make its NATO 2% spending target in his speech to the House of Commons, but Canada ignored that request. Two years later President Macron called the NATO alliance “brain dead” because of its members inability to make its spending targets, and the Canadian Prime Minister proved him right by privately telling other NATO leaders that Canada had no intention of ever meeting its defence spending commitments.

An Advisor Who is Now the Leader

It is easy to dismiss this history by saying that all of this happened under Prime Minister Trudeau, but that does not tell the full story. Mark Carney was not some casual bystander. The Trudeau government used his strong reputation and global credibility to support their agenda. Carney was a United Nations Special Envoy on climate change and the driving force behind the Glasgow Financial Alliance for Net Zero (GFANZ). GFANZ put pressure on global capital markets and financial institutions - including Canadian pension funds and banks - to make investing and financing decisions on the energy transition that were, in many cases, imprudent. It was this climate finance prominence that led Prime Minister Trudeau to make Mark Carney a senior advisor to his government. An advisor who briefed their cabinet and caucus. An advisor who spoke at their party conferences. An advisor who later ran to replace Justin Trudeau as leader of the party. While GFANZ has now collapsed and the Prime Minister version of Mark Carney has been very different from the Special Envoy and Advisor version, he was certainly pretending that the rupture he described in his speech was not happening for far too long.

All this said, he is our Prime Minister and I want him to succeed in his mission to stand up our national readiness. To do this, I think it is important that the Prime Minister learns why Canada is currently quite vulnerable whether he wants to acknowledge his role in it or not. He is doing the right thing in many areas to recalibrate our national priorities and prepare the country for the uncertain world ahead. I will continue to try and offer my support and advice in this national response to this critical moment in an effort to make this a non-partisan exercise. This means I will continue to call balls and strikes as I see them in an effort to support the country. I did this recently on CBC Radio’s The House when I praised the fact that the Prime Minister went to China to try and stabilize trade with that country, but was critical about going too far on autos in a way that will complicate the more important American manufacturing relationship.

We must all understand our recent history to ensure that we are not doomed to repeat some of the same mistakes that now has us playing catch up. Go Canada Go!

1. The full name of the speech was “Breaking the tragedy of the horizon - climate change and financial stability” and it can be found here: https://www.bankofengland.co.uk/speech/2015/breaking-the-tragedy-of-the-horizon-climate-change-and-financial-stability

2. His speech at Davos in January 2023 was entitled “The Pivot to Resilience: A Price Worth Paying?”