Economic Warfare: Canada’s Fight for Economic Sovereignty

In today’s geopolitical landscape, economic leverage is as potent as military might. Nations are increasingly waging battles through financial systems, supply chains, and technological dominance—placing Canada at the crossroads of economic security and global power shifts. Defense and economic security expert Raquel Garbers, principal architect of Canada’s most recent defense policy, recently shared her insights with Dialogue on this evolving landscape and its implications for Canada’s future.

Economic Warfare: The Opening Salvo

“Economic warfare is the essential first phase of preparing for conventional war,” Garbers asserted. “What happens in this arena will determine whether deterrence is restored or if we’re on a dangerous path toward conventional conflict.” She explained how economic coercion—through trade manipulation, resource monopolization, and strategic investment—has become a central tool in global rivalries. In this environment, economic interdependence can be a vulnerability and a strength.

A Strategic Crossroads: Target and Opportunity

Canada’s vast natural resources, Arctic access, and deep integration with the U.S. defense industrial base position it at the heart of this economic contest. While the United States and its allies urge Canada to bolster its economic defenses and secure critical supply chains, China, Russia, and other authoritarian states seek to exploit its strategic assets.

“The Arctic is heating up—not just in temperature, but in strategic importance,” Garbers emphasized. “As the melting proceeds apace, the Arctic will become a very strategic trade and military route. China has declared itself a near-Arctic state and is actively positioning itself in the region.”

With control over critical industries at stake—particularly rare earth minerals and energy reserves—Canada has become a battleground for economic influence and coercion. Its response will shape its future security and economic resilience.

The China Factor: Weaponized Interdependence

A key focus of the discussion was China’s systematic use of economic leverage to undermine Western competitors.

“The systematic abuse of economic activities—often covert, sometimes illegal, but always hostile—distinguishes economic warfare from routine statecraft,” Garbers explained. “For example, scientists are sent to do research in a foreign country, and when they return home, they are obligated to provide the intellectual property that they learned…because it’s an authoritarian state. No, is not an option.”

Beyond the threats posed by China, Garbers also highlighted the opportunities.

Charting a New Course: Canada’s Strategic Imperatives

Despite these challenges, Garbers believes Canada can emerge as a global economic leader, but it requires bold policy shifts. She outlined several key priorities:

• Unlocking Resource Potential: “Canada should get its minerals, its rare earth elements, and it should get its energy and gas out of the ground…We should stockpile. We should have price accords with our allies…We should be supplying that to them, and we should be feeding our own reindustrialization…”
• Reindustrialization: “After decades of focusing on services and high-tech, we need to reindustrialize to rebuild manufacturing resilience in this era of geopolitical tension.”
• Fortifying Economic Security: “We must adopt a far stricter approach to economic engagement with China. Ensuring that adversarial states are not embedded in our industries is crucial for protecting our national security and economic sovereignty.”

A Call to Action: From Vulnerable to Victorious

Garbers underscored the urgency of Canada’s situation. “If we don’t protect our industries and assert our economic power, we risk becoming an unreliable partner to our allies—and a vulnerable target for economic coercion.”

At this critical juncture, Canada faces a choice: take decisive action to fortify its economic security or remain exposed to the shifting tides of global economic warfare. By embracing these strategic imperatives, Canada can navigate the complexities of economic warfare and emerge as a stronger and more resilient nation on the global stage.

Further Reading

For deeper insights into the challenges facing Western democracies, Garbers recommends The Strategy of Denial: American Defense in an Age of Great Power Conflict by Elbridge Colby. This book explores the strategic realignments shaping today’s international landscape and the urgent need for stronger economic and military deterrence.