Walking on Fractured Foundations
Calgary, AB -- While Trump's second term reaches the eleventh month, the U.S.-Canada relationship isn't strained. It's muddied, messy, costly, and an exercise in economic sabotage and national soul-searching, on both sides, but Canada is finding it the most painful. Ottawa's halls of power used to echo climate threats, now it's tariff threats that have already cost billions, but the real rot festers from within: a federal government fumbling through political quagmire, a growing sense of Western alienation to surpass that of Quebec, and a sentiment metastasizing into outright separatism. (Metastasizing. Really spreading fast, usually medical vernacular. Grok needs to be more circumspect.)
What is most perplexing is the vituperation and vitriol heaped by energy gluttons onto the lap of energy producers. The gluttons (or miscreants of another sort) hector the Western Canadian petroleum energy sector—once the envy of the continent and the world— causing the sector to hemorrhage capital under the weight of stupefying regulation.
Mark Carney's Liberals crept into power on a quixotic whirl of anti-Trump zealotry in Canada's Spring 2025 election, idyllic promises to rid us of Trudeau disguised as false promises of resilience and diversification. Instead, Liberals delivered half-measures and hollow rhetoric, leaving Canadians to wonder if reconciliation with Washington is possible at all because we're too busy imploding at home. This isn't just serious; it's a slow-motion unraveling of Confederation that's never seemed more fragile.
The Political Powder Keg: From Crisis to Carney—and Back to Crisis
Canada's 2025 has been a hurling match including political whiplash. Justin Trudeau's resignation in January, triggered by Chrystia Freeland's dramatic exit and mounting tariff fears, Ukraine corruption, the departure of (whew) Guilbeault from Cabinet, may be the signs of a nation emerging from chaos. realeconomy.rsmus.com But what began it was a Liberal leadership race turbocharged by Trump's February tariffs—25% on most Canadian goods, 10% on energy—framed as retaliation for "fentanyl floods" and border woes. whitehouse.gov
Carney, the unelected banker with a Goldman Sachs pedigree, emerged as the anti-Trump avatar, riding a surge of patriotism that polls pegged at 91% favoring reduced U.S. reliance. nytimes.com Those were the days my friend. Carney's April victory was billed as a rebuke to both Trump and Conservative leader Pierre Poilievre, whose Liberal taunts of being Trump-lite suddenly made him look toxic amid "51st state" jargon. aljazeera.com
Fast-forward to December: Carney's minority government clings to power via NDP props, with cracks that are widening. Business Outlook Surveys show 60% of firms citing "financial, economic, and political uncertainty" as their top headache, with investment flatlining and hiring stalled. budget. canada.ca
October's 10% tariff hike on Canadian imports—retaliation for an Ontario anti-tariff ad (!) featuring a Reagan voiceover—pushed GDP growth forecasts down to a limp 1.8% for 2025, per Alberta's budget. theguardian.com Critics, including X users like @DiaryofaFixer, decry Carney's "greatest climbdown," from crisis hyperbole to touting the "best of bad deals."
Poilievre's Conservatives appear muddled by their own tariff ambivalence and mount a flaccid opposition, but the real venom brews in the West where federal dithering has turned alienation into existential fury.
Alberta's Agony: Energy Heartland on the Edge of Secession
No province embodies the peril of poor federal leadership like Alberta (if you ignore Quebec's public prayer bans, and guzzling Alberta oil, to which they're addicted like it was fentanyl), Canada's oil-soaked powerhouse and the epicenter of a separatist sentiment gone from fringe to front-page. Trump's tariffs, exempting energy at a "merciful" 10%, still widen the Western Canadian Select discount to $17.10 per barrel in 2025/26—up from $13.20—slashing provincial revenues by billions and projecting a $5.2-billion deficit. reuters.com
U.S. FDI in this energy sector, which hit CAD 69.6 billion at 2024's end, has stalled; ExxonMobil and Chevron have shelved expansions amid the fog of trade wars and Ottawa's cap-and-trade flip-flops. fraserinstitute.org Yet, the deeper betrayal is domestic: Federal regulations—Impact Assessment Act bottlenecks, emissions caps, and tanker bans—have strangled growth, deterring the private capital needed for pipelines and LNG that could reroute exports to Asia. reuters.com
November's Carney-Smith MOU was hailed as a detente: Scrapping the oil-and-gas emissions cap and clean electricity rules in exchange for carbon pricing tweaks and a new West Coast pipeline study. But is it lipstick on a pig? reuters.com
Environmentalists cry foul over Indigenous consultation shortcuts via Bill C-5's fast-track provisions, while industry insiders whisper that without ironclad regulatory certainty, investors won't bite—echoing a Fraser Institute lament that Canada's "nine bad laws" have chased away $47 billion in upstream spending since 2014. fraserinstitute.org
Alberta's Premier Danielle Smith leverages this for economic independence under the Constitution: Her government's May law easing referendum thresholds has polls showing 30% of Albertans (and 55% feeling "unfairly treated" by Ottawa) open to secession if Liberals hold sway. angusreid.org
X chatter amplifies the rage—@464591611U blasts Carney's "spending spree" amid $1.3-trillion debt, while @RohanNeon credits Trump for unwittingly crowning Carney by igniting boomer nationalism. Separatism isn't just talk; the Alberta Prosperity Project's referendum push eyes 2026, fueled by a "continentalist populism" that views the U.S. as kin against Eastern exploitation. Saskatoon's thestarphoenix.com
This isn't Quebec's cultural schism—it's economic jihad. Alberta's energy position, pumping 87% of Canada's crude exports (3.3 million barrels daily, mostly U.S.-bound), is a federal cash cow via equalization, yet Ottawa's green tilt blocks diversification. Trans Mountain's expansion opened Asian doors in May, but without more pipelines, producers are landlocked, prices depressed, and jobs evaporating—hundreds of thousands at risk, per TD Economics. economics.td.com
Trump's "drill, baby, drill" contrasts starkly: U.S. FDI in fossil fuels tripled domestic commitments since 2017, while Canada's sector saw capex crater 56% over the decade. usreport2025.fdiintelligence.com
Capital's Exodus: Regulations as the Real Tariff Wall
The tariffs are brutal, but Canada's own policies are the silent killer. Foreign direct investment plunged 39% in Q2 2025 to $18.5 billion, half U.S.-sourced, as firms flee regulatory thickets. betterdwelling.com
Pension giants like the "Maple Eight" park just 25% of their $2.3-trillion war chest domestically, chasing U.S. yields amid our "scale-up gap"—a toxic brew of red tape and tax hikes deferred (not scrapped) to 2026. theglobeandmail.com Human capital follows: 29,186 emigrated permanently in Q1 alone, per StatsCan, with tech and energy talent bolting for Texas and California. theglobeandmail.com
Energy markets exemplify the blockade. LNG Canada's Phase 2 ($33 billion) and small modular reactors dangle billions, but federal hurdles—CER Act delays, Impact Assessments—keep shovels grounded. ainvest.com The OECD ranks Canada's FDI framework the G7's most restrictive, with discretionary screening scaring off globals who crave predictability. theglobeandmail.com
Carney's $50-billion Resilience Fund and Major Projects Office sound bold, but Budget 2025's $280-billion capital binge balloons the deficit to $78 billion, debt-to-GDP ticking to 43%—a fiscal house of cards in trade war winds. conferenceboard.ca
As @Pulse1Pilot notes on X, Carney's Ukraine jaunt amid domestic debt ($30k per Canadian) reeks of misplaced priorities.
Our Take: Critique Without Mercy—A Reckoning Long Overdue
Truth demands critique: Is Carney's tenure a mirage of competence, propping up a Liberal machine that's mastered optics over outcomes? Tariffs have shaved 1.5% off GDP and spiked unemployment to 7.9%, but Ottawa's regulatory sclerosis—emissions caps one day, MOU backpedals the next—has shredded investor trust far more than Trump bluster. economics.td.com
Alberta's separatism isn't Trump inspired; it is reaping federal neglect, whereas equalization siphons $20 billion annually from Alberta to meet Liberal priorities anywhere but Alberta, from energy royalties while blocking the very pipelines that could fund so much more for Canadians. en.wikipedia.org
U.S. FDI, once a bedrock at $683.8 billion total stock, now wavers as American companies eye a deregulated bounty—Canada's loss, their gain. Reconciliation with Trump? An uphill battle under this administration; his NSS brands allies as "foes," and tariffs are tools he waves at a lot. chathamhouse.org But the deeper threat is internal: Capital flight isn't fakery—it's flight from a jurisdiction that's forgotten its purpose. Carney's diversification dreams (doubling non-U.S. exports by 2035) ring hollow without slashing interprovincial barriers (unlocking $200 billion, per the Chamber) and axing the "nine bad laws." thehub.ca
Alberta continues to lead: Surgical retaliations like energy export taxes, CANZUK pacts, and private-led pipelines, will carry the energy sector to the growth required in the 21st century, not Ottawa begging.
This direction—urgent, humanized by Alberta's grit yet ruthlessly critical of federal fumbles—paints the threat as a catalyst for reinvention, not ruin. We have the resources, talent, and tenacity; squander them on untenable half-baked commissions, and we will encounter fracture. Time has come to rail against our own complacency.
Sources woven for transparency; data from StatsCan, Fraser Institute, and real-time X sentiment.
By Mack McColl and Grok, xAI, Co-Correspondents, McColl Magazine
