Dr Vineet Singh

The Rise of Imported Polarisation

In 1981, 93% Canadians were white Caucasian, which is projected to reduce to 67% by 2026. There has been an unprecedented rate of immigration, especially over the past 10 years. In addition, Canada took thousands of Syrian and Afghanistan displaced people.

Most of these immigrants come from developing countries, and in the process, they also bring some of those politico-religious conflicts. This is inadvertently reflected in Canadian vote-bank politics, so conflicts that originated elsewhere, in Punjab, Jammu & Kashmir, Sri Lanka, Afghanistan, and the Middle East, get mixed with the dynamics of local and national politics here in Canada. There are diverse ways in which people whose everyday lives have been uprooted and shaped by both violent conflict and spaces of asylum understand and protest war, violence and displacement transnationally. Many Canadians genuinely sense this shift but struggle to articulate it coherently. 

In August 2022, Vancouver Police publicly named a list of the most violent criminals, and nine of the 11 Canadian men were of Punjabi origin. The nexus between drug lords, violent gangs like this and the so-called Khalistan movement is well known. Then there is a whole list of events relating to some degree of impunity of these militants after they were involved in the biggest terrorist attacks from Canadian soil by bombing Air India 182 on June 23rd, 1985. Sadly, Canada’s judicial and political system failed miserably to bring the perpetrators to justice. Ongoing diplomatic relations between India and Canada, following the killing of one such criminal drug lord, Hardeep Singh Nijjar are covered extensively by the Canadian and the world media. India had strongly opposed Canada’s lack of response to their internal security threats. Well-publicised open threats of murder towards Indian diplomats, Indian citizens, including the Indian PM, have been repeatedly made. Indian concerns have, until recently had been met with some degree of arrogance and dismissiveness and in tune with Canadian values, freedom of speech.

Sikh-Canadian parades featuring portraits of violent separatists, proclaimed terrorists and their “community organisations” are becoming fronts for foreign political agendas. But local politicians are navigating these pressures with discomfort—or, at times, with calculated silence. These tensions are no secret to Canada’s security professionals.

On 22 December 2020, Karima Baloch, a very prominent voice of the Baloch Student Wing, of Pakistan, was found dead under mysterious circumstances, submerged under Toronto's waterfront. Several politicians and activists, including the Baloch Yakjehti Committee (BYC), claimed that she was murdered by the agents of the Pakistani state agency ISI (Inter-Service Intelligence). Despite these concerns and assertions, Canadian authorities ruled her death as "non-criminal," although her death raised significant concerns and demands for further investigation.

Similarly, the Sri Lankan government’s alleged free run to pro-LTTE sympathisers and activists and state-directed violence during 2008 and early 2009 killed tens of thousands of Tamil civilians and displaced hundreds of thousands of Sri Lankans. In response, different sections of the Sri Lankan Tamil diaspora in Canada mobilised and protested the atrocities of the Sri Lankan government, and the Canadian government’s inaction and silence on these extensive human rights violations. Their efforts gained media attention during a protest that stopped traffic along the Gardiner Expressway in Toronto.

Canada welcomed 45,000 Syrian refugees in 2015, although the cultural-economic impact of this move appears less volatile for Canada at this juncture than in some Scandinavian countries or Germany. However, continuing ethnic strife across the world is turning thousands of people into refugees.  

Canada has been a magnet for many international criminal syndicates from Mexico, Vietnam, the Italian mafia and the Indian subcontinent originating from the state of Punjab. The Government of India had provided names of several dreaded gangsters, radicals, drug smugglers and proclaimed terrorists, which India claims is turning out to be a safe haven for such elements to the Canadian government. Goldy Brar is one of them. India has also flagged 9 separatist outfits. Progress in this area has been very slow over the years.  

Factoring all aspects cited, the enactment of unique state-led “geopolitics from below” demonstrates how diaspora geopolitics “traverse national borders and defy any monolithic conception of belonging to or making a home in a single country.” Some of the naturalised Canadian citizens who sought asylum from other countries are orchestrating terror activities back “home” despite becoming Canadian citizens!

CSIS has repeatedly warned that foreign states are cultivating influence networks inside religious institutions and community groups. The Royal Canadian Mounted Police (RCMP) has noted the growing presence of overseas political conflicts spilling onto Canadian soil. Yet, clear political leadership on these issues remains elusive. The fear of being labelled discriminatory has often outweighed the responsibility to enforce basic civic norms.

Multiculturalism is Being Stretched Beyond Its Intent

Canada’s multicultural framework was designed to protect cultural expression, not to provide political immunity for militant factions advancing extremist narratives or foreign-state interests. Yet the current environment rewards the loudest mobilisers, not the most representative voices. Highly organised groups—sometimes with transnational ideological backing—exercise influence that far exceeds their demographic size.

This distortion does not strengthen diversity; it strains it. When multiculturalism becomes a shield for radical messaging, it undermines the social trust on which the entire model depends. It has also led to diplomatic embarrassment for the Canadian government repeatedly.

Domestic Politics, Geopolitics and Western Alliance

Canadian Political Parties must draw a line, but the overall process and framework of Canadian democracy cater to dependency on a bulk vote bank with strong community ties, which is seen more commonly in Canadian Sikh communities and Canadian Muslims via temples and mosques. They submit forms to Elections Canada (the federal election body), get at least 100 voter signatures from their constituency. Then they build a team, raise funds, and campaign within the constituency. Many Sikh temples have been infiltrated by some hardcore extremists who take this opportunity to assert their terror ideology, for this well-oiled support, which is not available to prospective politicians anywhere else so easily.

Even though some ethnic minorities may be less than 2% of the total population, and may be impacting minimally in the overall scheme of things.  People around the globe perhaps don’t understand this incumbency of Canadian politics. Some would call it callousness, short-sightedness, perhaps a racist lens (it is a non-white problem) or sheer arrogance and laziness when the whole national brand is being eroded by these elements in this increasingly interdependent and multipolar world.

Inadvertently, then, the most worrying development is sheer political normalisation. When any political party feels compelled to appease hardline immigrant groups to preserve electoral viability, the damage extends beyond one constituency.  It signals to extremist actors that intimidation works, that silence can be purchased and that Canadian civic identity is negotiable. This cycle of bullying and exploitation of the system perpetuates. This problem has amplified now, and several countries besides India have openly expressed concerns.

What are the options for Canada?

A cross-party bill in the parliament is long overdue, which should forbid courting organisations that glorify violence, and no indulgence for foreign-state patrons should be tolerated. In this regard, there should be no ambiguity about where Canada draws its civic boundaries. Canada must work to reclaim the Centre of Canadian Democracy. With its vibrant democracy and free speech, Canada, no doubt, has this inherent capacity to steer itself away from deeper fragmentation, but in doing so will also require transparent scrutiny of foreign funding in cultural and religious institutions.

Stronger enforcement mechanisms against the glorification of violence or terrorism, regardless of group or origin, should be the norm.  This message should be propagated via media, which, unfortunately, has failed to invoke debate as some media outlets have toed the government line. Overall, Canadian leaders and elected officials must articulate that Canadian politics is not an extension of overseas conflicts.

Renewed investment in civic education, emphasising that cultural identity enriches Canada—and does not replace citizenship as the common denominator. None of this is about singling out communities. It is about reaffirming that civic values, to imported grievances, define political life in this country.

A Closing Warning

Democracies rarely collapse suddenly. They decay slowly—through hesitation, through deference to fringe voices, through the normalisation of what previously would have been unthinkable. Canada stands at a moment when candour is necessary. Ignoring the encroachment of extremist politics is not tolerance; it is abdication of duty and responsibility.

Canada can be a model of pluralism. But it must also be a serious state—one that enforces its laws, defends its civic space and refuses to let domestic politics become a battleground for foreign struggles. With the changing demographics and geopolitical tensions which Canada cannot be immune to the choice is still for Canada to make.

Conclusions

There is still time for Canada to act decisively against criminal elements that usurp the open and free society and democratic system to espouse violence against foreign leaders. It may become too late, just like for Pakistan, which hosted terrorists from all over the world. From the 1980s onwards, for geopolitical reasons, it gave shelter and asylum to hijackers of planes and promoted violent terrorist acts against neighbouring India. Now the same people are running amok in Pakistan, creating a law and order situation for the national government that has become afflicted with domestic terrorism. It will depend on the sagacity and political wisdom of the Mark Carney government to gradually restore civic order by prosecuting the criminals, gangsters, drug and arms smugglers who usurp the rhetoric of free speech while espousing violence against other Canadian citizens, foreign diplomats and foreign leaders. Time to act is NOW. No more dithering, as it would consume Canada’s civic polity by the scourge of domestic terrorism.

US-Canada Trade Summary

The United States’ leading exports to Canada are vehicles, machinery, and energy products, along with over $30 billion in agricultural products, including bakery goods, cereals and pasta, fresh vegetables, fruit, and ethanol. Canada’s leading exports to the United States are energy products and vehicles, together with over $40 billion in agricultural products, including baked goods, cereals and pasta, vegetable oils, beef and beef products, processed fruit and vegetables, and fresh vegetables.

The United States and Canada, together with Mexico, are parties to the United States-Mexico-Canada Agreement (USMCA), which entered into force on July 1, 2020, after strong objections were raised on the previous version of the North American Free Trade Agreement (NAFTA) by Donald Trump during his first term as US President.

U.S. goods and services trade with Canada totalled an estimated $909.1 billion in 2024.

U.S. total goods trade with Canada was an estimated $761.8 billion in 2024. U.S. goods exports to Canada in 2024 were $349.9 billion.  U.S. goods imports from Canada in 2024 totalled $411.9 billion.  The U.S. goods trade deficit with Canada was $62.0 billion in 2024.

U.S. total services trade (exports plus imports) with Canada totalled an estimated $147.3 billion in 2024. U.S. services exports to Canada in 2024 were $90.3 billion, up 4.5 per cent ($3.9 billion) from 2023. U.S. services imports from Canada in 2024 were $57.0 billion.

The U.S. services trade surplus with Canada was $33.2 billion in 2024.

US Canada Tourism Revenues

• In 2019, over 15 million Americans visited Canada, making it a top international destination.

• Canada welcomed approximately 10 million visitors from the US in 2020, a significant drop due to the pandemic.

• The tourism sector in Canada contributed around CAD 105 billion to the economy in 2019.

• Outdoor activities, cultural experiences, and urban tourism are major attractions for US travellers in Canada.

• The average spending per US visitor in Canada was about CAD 1,500 in 2019.

• Post-pandemic recovery is underway, with increasing travel interest and easing of restrictions.

The volume of Canadians taking road trips into the U.S.—the means by which most Canadians visit—dropped by 33% last month compared to June 2024, according to new data from Statistics Canada, following a 38% drop in May. There was also a 22% decline in air travellers from Canada year-over-year. June was the sixth consecutive month of steep declines in inbound Canadian travel, including double-digit year-over-year drops in car travel and air travel to the U.S. every month since April. This tourism boycott by Canadians is likely to cause an expected overall economic loss of $29 billion in 2025 for the American tourism industry. Travel in the other direction is also down, as fewer Americans travelled to Canada in June compared to last year, with car travel down 10% last month—down slightly from an 8% drop in May, per Statistics Canada data.

Scenario Post President Trump 2.0

Obviously, the eruption of this trade war between Canada and the United States in 2025 has ruptured North America’s tightly woven economic ties.

Sweeping U.S. tariffs on Canadian steel, aluminium, autos, and agricultural products prompted Canada to retaliate with counter-tariffs on $30 billion of U.S. imports. The result has been heightened uncertainty for businesses, supply-chain disruption, and political friction across the world’s longest undefended border.

To make matters worse the most recently with a  new Executive Order from the White House, the U.S. then decided to increase tariffs on non-CUSMA (Canada–United States–Mexico Agreement) compliant goods imported from Canada, from the current 25% to 35%, from  August 1.

President Trump, in his Executive Order, attributed to increase to insufficient cooperation in curbing the flow of fentanyl and other illicit drugs into the U.S., as well as retaliatory actions taken by Canada.

For Prime Minister Mark Carney, the first Canadian leader to take office with deep financial and central banking experience, the crisis is both a test of statecraft and of economic management. It would not be incumbent upon Canada to defend its national interests without risking a spiral of escalation that could damage jobs, erode competitiveness, and undermine confidence in the rules-based trading order eventually.

What are the options for Canada?

It is hard to predict if this is going to be the new world order or if things will change post-President Trump 2.0. However, given the divisive politics at play, Canada will have to think long-term. This article, therefore, tries to reflect on some remedial options—immediate, medium-term, and long-term—that the Carney government can deploy to navigate the crisis while building future resilience.

The Stakes of the Dispute

Just to reiterate the background, the Canada–U.S. economic relationship is uniquely interdependent. Roughly three-quarters of Canadian exports go to the United States, while Canada is the second-largest market for U.S. goods and services. Key industries—autos, aerospace, energy, and agri-food—rely on cross-border supply chains that blur the line between “Canadian” and “American” production.

A trade war disrupts not only exporters but also manufacturers, workers, and consumers on both sides. The immediate risks for Canada include:

• Job losses in export-dependent sectors. Steel, aluminium, and auto production are heavily concentrated in Ontario and Quebec, making them politically sensitive.

• Supply-chain dislocation. Tariffs on intermediate goods affect downstream industries that rely on just-in-time cross-border inputs.

• Investor uncertainty. Tariffs erode predictability, leading firms to defer investment decisions.

• Political polarisation. Domestic divisions may deepen if some provinces bear disproportionate costs.

Against this backdrop, the Carney government must balance firm defence of Canadian industries with pragmatic diplomacy to restore stable trade relations.

Immediate Remedial Options (0–30 Days)

Businesses will need emergency economic relief; the government will need to start urgent diplomatic engagement, trade talks, and lastly prepare for legal challenges under USMCA and WTO

Short-Term Strategy (1–6 Months)

In the next few months, there needs to be ongoing negotiation with leverage, internal political forces and coalition partners would need to be engaged to strategise targeted industrial policy with monetary and fiscal coordination.

Medium -Term Resilience (6–24 Months)

Export Diversification

The trade war underscores the danger of overreliance on a single market. Canada should accelerate diversification toward Asia, Europe, and Latin America. This requires not only trade missions but also structural investment in logistics, digital trade, and regulatory harmonisation with alternative partners. Having a long-term strategy which is inclusive across the spectrum, involving all political stakeholders and parties, will help. It should not be a refuge for one government.

Indo-Canadian strategic cooperation can go a long way in offsetting the Canadian trade deficit and open newer opportunities.

Canadian investment in India remains strong, particularly through pension funds that have invested heavily in infrastructure and energy. These investments have continued despite diplomatic challenges, with Canadian portfolio investments in India estimated to exceed US$75 billion. Over 600 Canadian companies operate in India, and more than 1,000 are active in various capacities across the Indian market.

The resumption of free trade agreement (FTA) negotiations and efforts to normalise ties between the two nations present a strategic opportunity for New Delhi to diversify its supply of critical minerals, including lithium, nickel, cobalt, graphite, and rare earth elements. With China imposing curbs on key mineral exports such as rare earth magnets, India faces mounting pressure to identify alternative, dependable sources to fuel its rapidly expanding EV, solar energy, and electronics sectors.

Canada, which exported over US$50 billion worth of critical minerals in 2023—primarily to the U.S.—is emerging as a promising partner. It holds reserves of more than 31 critical minerals and is known for its environmentally and socially responsible mining practices.

India currently depends heavily on China for essential minerals, importing 71% of lithium and 42% of rare earth imports. In contrast, Canada accounts for just 0.13% of lithium and 0.02% of rare earth imports to India, according to the Asia-Pacific Foundation of Canada.

Canada’s massive mineral reserves can be a potential alternative. Just to put it in context, in 2024, Canada exported $5 billion of goods to India and imported approximately $8 billion worth. Indian imports of Canadian goods represent approximately 0.7 per cent of Canada’s goods exports, making India the tenth-largest buyer of Canadian products.

• Canada’s principal exports to India consist of agricultural products, specifically dried legumes, and energy products, coal, as well as wood pulp and fertilisers.

• Meanwhile, Canada’s principal imports from India consist of pharmaceuticals, machinery, both nuclear and electronic, as well as several classes of consumer goods, including jewellery and clothing. The trade war between India and the US presents huge opportunities to diversify and expand in jewellery and clothing, which is being hit the most by the US’s trade tariffs against India.

• Political tensions had strained diplomatic relations, though despite this turbulence in the relationship, trade between the two nations had remained relatively stable and largely free of any punitive restrictions.

Long-Term Resilience: (Post 24 months)

So as to deal with an unreliable, economic and trade partner US, both Canada and India must minimise their diplomatic differences that cropped up during the Justin Trudeau regime. Canada needs to detach itself from the “Five-Eyes Alliance” to counterbalance US economic hegemony and give more emphasis to India’s security concerns about state support to Canadian-based terrorist organisations and individual Canadian citizens who are creating mayhem in some of the Indian states. If both countries can repair the diplomatic relationship and turn the trade crisis into an economic opportunity, it will be a win-win situation for both and a serious lesson for Uncle Sam.

India is a rising giant:

• India’s population of 1.4 billion people has the fourth largest nominal GDP, can provide a vast consumer base for Canadian exporters, with over 1.8 million Canadians of Indian origin, serving as a bridge between the two nations.

• A quarter of Canada’s exports to India are dried legumes. In 2017, India imposed tariffs on Canadian exports of legumes to protect domestic production. These tariffs were lifted in 2023, and exports of this product have since rebounded. Given the country’s growing urban population, food demand is set to rise, providing opportunities.

• There is a huge scope to grow exports of petroleum oil and natural gas.

• Exports of fertilisers, including potash, to India have grown over the last two decades. In 2022, Indian Potash Limited signed a memorandum of understanding with Canpotex, Canada, outlining an agreement to supply up to 1.5 million tonnes of potash annually for a period of 3 years to Indian fertiliser companies. Given India’s sizable agricultural sector, demand for Canadian fertilisers continues to offer good growth potential.

• India imported gold worth just over 50 billion USD in 2024. Widespread economic uncertainty has driven gold prices to record highs in recent months. Supported by a buoyant price outlook, Canadian gold production is on an upward trend, and India is an important destination for the precious metal.

A Look Ahead

Looking ahead, India remains an attractive export market, but the product mix is shifting. Demand for coal is set to taper, while demand for Canadian critical minerals is likely to rise, behind strong demand from India and large reserves in Canada. Nickel is a prime example of a rapidly growing critical mineral export, with its value having doubled over the past decade.

India’s digital economy is growing much quicker than the overall economy. According to estimates by the Indian Council for Research on International Economic Relations (ICRIER), the digital economy is projected to account for 20 per cent of national income by 2029. This means services trade, both in imports and exports, will play an increasingly important role in the trading relationship moving forward.

In a time of rising U.S. protectionism and ongoing trade disputes with China, a trade deal with India would allow Canada to diversify its export portfolio and gain greater access to rapidly growing consumer demand.

Indian demand for Canadian agricultural products, including food and fertilisers, will remain a cornerstone of bilateral trade.

India’s natural gas consumption is projected to increase by 60 per cent between 2023 and 2030, according to the International Energy Agency. This surge in demand is expected to double the country’s LNG import requirements, as domestic production is expected to grow at a much slower pace.

The share of petroleum oil exported to countries other than the United States rose notably in 2024. While China is the largest buyer, there are signs of growing Indian interest. In 2024, the Indian energy multinational, Reliance Industries, purchased 2 million barrels of Canadian crude, the first shipment from the Trans Mountain pipeline. Urbanisation and a growing middle class in India will see per-capita energy consumption grow, presenting an opportunity for increased exports of Canadian petroleum to India.

Canada is now making amends in its diplomatic behaviour and in June 2025, Mark Carney met PM Modi on the sidelines of the G7 summit in Canada, opening a new phase in the bilateral relationship. India’s new High Commissioner to Canada, Dinesh Patnaik, formally assumed office in Ottawa, further signalling efforts to restore normalcy in relations. India also indicated the possibility of reinstating Canada’s full diplomatic presence. The National Security Advisor, who previously accused Indian officials of involvement in terror activities, visited New Delhi and met with India’s NSA. Canada recently arrested a Sikh-Canadian citizen, Inderjeet Singh Gosal, who was accused of terrorist activities in India.

Canada’s National Security and Intelligence Advisor, Nathalie G. Drouin, recently visited New Delhi and issued the following statement:

“Thursday in India, I met with Mr. Ajit Doval, India’s National Security Advisor. We discussed our respective security concerns and committed to non-interference, including refraining from transnational repression. We also agreed on the importance of reciprocal exchange of information and mutual responsiveness. This meeting followed constructive discussions held between Prime Minister Carney and Prime Minister Modi at the G7 Leaders’ Summit in Kananaskis, Alberta, during Canada’s G7 presidency year. With these talks, and the recent exchange of high commissioners between Canada and India to renew the diplomatic relationship, we are advancing a relationship based on mutual respect, the rule of law, and a commitment to the principle of sovereignty and territorial integrity.” 

Canadian Foreign Minister Anita Anand is scheduled to visit New Delhi next month to repair the bilateral ties.

Summary

Mark Carney entered politics with a reputation as a technocrat who could steady turbulent markets. Now, as Prime Minister, he faces a political and economic crisis of continental significance. The trade war demands both firmness and pragmatism: defending Canadian industries without allowing the dispute to spiral into a lose-lose confrontation.

The most effective approach is a two-track strategy: pursue active negotiations in good faith while preparing credible countermeasures and legal challenges. This reassures businesses that Canada is defending their interests, signals to allies that Canada remains a champion of rules-based trade and makes clear to Washington that Canada will not be an easy target.

In the short term, emergency relief and precise diplomacy can prevent irreversible damage. In the medium term, coalition-building and targeted industrial policies can shift the balance of leverage. In the long term, export diversification and domestic value-added strategies can lessen Canada’s structural vulnerabilities.

The risks of escalation are real, but so are the opportunities. Managed wisely, this crisis could become a catalyst for Canada to build a more resilient, diversified, and competitive economy. For Prime Minister Carney, the trade war is a daunting test—but also a defining moment to shape Canada’s economic future. As discussed above, the India-Canada partnership will be a game changer with India’s humongous market, the fastest growing major economy with a pool of skilled workforce and Canada, the cradle of rich natural resources and technologies in many important sectors. A famous quote by Albert Einstein is relevant here: Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.