Ben Woodfinden: The EU is an economic disaster. What exactly is Mark Carney after?

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This obscures the more useful and important question, which is not whether Canada should join the EU in some new, undefined capacity, but whether it needs to. We don’t. For instance, if we want free trade with the EU (which is not the same as being in the single market), Canada signed CETA, the Comprehensive Economic and Trade Agreement, with the bloc back in 2016. A decade later, 10 member states, including France, still have not ratified it. If we want to deepen economic ties with the EU, why don’t we start here?

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It might not be as flashy and sexy, but getting CETA fully ratified, deepening the defence procurement and research ties that are already underway, building out the data and satellite infrastructure both sides say they want do not require anything that changes our existing arrangements and would benefit both Canada and the EU.

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But even if full, or even partial membership, is not in the cards, we should think carefully about what we are attaching ourselves to. The European Union is in many ways a remarkable political accomplishment.

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The 27 member nations of the EU (and the few others closely intertwined through the EFTA) have created an economic entity that guarantees the free movement of goods, capital, services, and people — known as “the four freedoms.” The GDP of this single market is roughly 18 trillion Euros (rouglyly C$30 trillion), one of the largest economies on the planet.

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More access to this market is a great idea, but let’s be honest about what full integration with that would entail.

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EU member states give up a significant amount of sovereignty and national self-determination. National courts must set aside domestic law that conflicts with EU law, and governments can no longer block goods, services, or workers from other member states to protect their own industries. Environmental, energy, labour and procurement regulations must be aligned, as well. Deeper still, the customs union means Brussels alone sets tariffs and negotiates trade deals with non members, so no country can strike its own agreement with Washington or Beijing.

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Eurozone members surrender monetary policy entirely to the European Central Bank and accept Brussels-enforced limits on deficits and debt, and Schengen states abolish their own border controls with each other altogether. Together these amount to one of the deepest peacetime surrenders of national control any democracy has ever voluntarily accepted. You can make the argument that these are sacrifices are worth making, but make no mistake that joining this union means sacrificing sovereignty at a level that, quite frankly, I think most Canadians divorced of our current fight with the Americans, would be very uncomfortable giving up.

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While the EU might be a massive market we should want access to, it faces its own major challenges. Mario Draghi, the former president of the European Central Bank and briefly prime minister of Italy, authored a major report in 2024 that exposes how sclerotic and stagnant the EU economy has become. He found that the income gap between the EU and the United States had roughly doubled in the two decades before the report, from about 15 per cent to about 30 per cent, and that closing it would require something like 800 billion euros a year in new investment.

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Two years on, only a small fraction of Draghi’s own recommendations have been fully acted on, and the International Monetary Fund now projects that high energy costs alone will trim eurozone growth by roughly half a point this year and drag on it again in 2027. The innovation numbers are just as stark: of the 147 unicorns, private startups valued at over $1 billion before they ever go public, founded in Europe between 2008 and 2021, roughly 30 per cent packed up and moved abroad, mostly to the U.S., and no European company built from scratch in the last 50 years has grown into a 100 billion euro (C$160 billion) firm, while seven American companies crossed one trillion euros ( C$1.6 trillion) in that same span.