Canada

Canada exists because Americans invaded in 1812—and because French Canadians would never accept absorption into an Anglophone majority. The British North America Act of 1867 created a federation as 'happy medium': full merger was impossible because Quebec's distinct identity made legislative union politically unthinkable. This constitutional compromise produced a nation that has spent 158 years managing the tension between two founding peoples while becoming economically dependent on a third country that keeps threatening absorption.

Indigenous peoples occupied this land for at least 15,000 years before European contact. French colonization began with Champlain at Quebec in 1608, creating New France along the St. Lawrence. British conquest in 1760 absorbed French colonists into an empire that would need to accommodate them. The Constitutional Act of 1791 split Quebec from Ontario; the 1867 Confederation reunited them within a federal structure where provinces controlled education, health, and—crucially—natural resources. The Prairie provinces, however, were not granted resource rights for 25 years after joining, a constitutional inequality that still shapes regional resentments.

Canada acquired functional sovereignty between 1919 (separate signature of the Treaty of Versailles) and 1931 (Statute of Westminster), but couldn't patriate its own constitution until 1982 because Quebec never agreed to an amendment formula. Full constitutional independence came without Quebec's consent, creating a wound that spawned two sovereignty referendums—the second, in 1995, failing by less than 55,000 votes. In 2022, Quebec unilaterally amended the constitution to declare French its only official language, demonstrating that the founding tension remains unresolved.

The economic story is simpler but equally defining: America swallowed Canada's economy without conquering its territory. Eighty percent of Canadian exports flow south; exports to the US alone constitute 20% of GDP. This $2.1 trillion economy has barely grown in per capita terms over the past decade—real GDP per capita is less than 1% higher than in 2014. The combination of housing unaffordability (Toronto and Vancouver rents up 18% since 2020, pre-construction sales down 90%), stagnating productivity, and immigration-driven population growth (3.2% surge between 2023-2024) created the political crisis that ended Justin Trudeau's nine-year tenure in January 2025.

Mark Carney, former Bank of Canada and Bank of England governor, replaced Trudeau as Liberal Prime Minister, capitalizing on his perceived credibility to negotiate with Donald Trump. The tariff threat is existential: a 25% tariff would trigger recession, though CUSMA compliance has so far kept most Canadian exports duty-free—the lowest effective tariff rate of any major US trading partner in 2025. But negotiating with Trump is not the same as managing the underlying vulnerability. Canada remains what it has always been: a nation that exists in the negative space between American expansion and French-Canadian identity, sustained by resource extraction and dependent on access to a market it cannot control.

By 2026, Canada will face the consequences of its population pivot—immigration targets cut from 485,000 to 395,000 permanent residents, population growth slowing to the lowest rate since the pandemic. Housing starts are expected to fall over 10% in 2026. The country that avoided recession through immigration-fueled GDP growth may discover that the cure created its own pathology: a housing market that made cities unaffordable, public services overwhelmed, and a political backlash where 58% now say Canada accepts too many immigrants—up 14 points in a single year. Like a boreal forest dependent on periodic fires for regeneration, Canada may need the disruption it has spent decades avoiding.