Canada enters 2026 at what Prime Minister Mark Carney has rightly called a “hinge moment.” Canada’s long-standing relationship with the US, based on ever-increasing economic integration and a rock-solid security partnership, is history.
Ongoing trade uncertainty will weigh on the Canadian economy, and the US administration will wield unilateral military and economic power in the Western Hemisphere. Canada’s efforts to diversify its trade and strategic relationships will face powerful headwinds.
The challenge for Ottawa—and Canadian firms more broadly—will be to play defence and offence at the same time: managing an unpredictable and unreliable US while carving out new roles in an increasingly unstable world.
The Eurasia Group predicts the top risk for Canada this year is what they call the US political revolution. The political risk consultancy assessment is that Trump’s systematic effort to dismantle checks on his power and weaponize the machinery of government against his political enemies will inevitably reshape not only Canada-US relations, but the Canadian economy, and Canadians’ engagement with the rest of the world.
Note. It’s important to remember the three factors the Eurasia Group looks at the most when compiling their annual Top 10 Risks list, are likelihood, imminence, and impact. They rank ‘US Political Revolution’ at the top of their annual ranking for 2026.
Sources:
Eurasia Group’s Top Risks of 2026 – Implications for Canada, January 5, 2026 https://www.eurasiagroup.net/issues/Top-Risks-2026-Implications-for-Canada
Eurasia Group’s Top Risks of 2026 – Full report https://www.eurasiagroup.net/issues/top-risks-2026