Alongside Australia’s familial bond with New Zealand, and historic and cultural ties to the United Kingdom, Canada should be a similarly close partner for Canberra. The two countries share a broad middle power worldview and keen investment in multilateral architecture and free trade. They are both embedded in the Five Eyes intelligence network; their federal and Westminster political institutions are alike; and there’s a shared temperament of restraint over brashness, as well as a keen desire to project trust over power.
In addressing the Australian Parliament this week, Canadian Prime Minister Mark Carney referred to the two countries as “strategic cousins.” Yet his visit to Australia highlighted that despite such symmetries, the bilateral relationship between the two countries is remarkably thin. Although they are the world’s ninth and 14th largest economies, trade between the two is relatively modest, while the security relationship tends to be bound to broader coalitions rather than organized bilaterally.
However, as geopolitical competition intensifies and economic dependence becomes weaponized by great powers, trusted partners like Australia and Canada need to find ways to build resilience in concert with each other. This means finding ways to enhance what should be a very natural relationship.
Both countries are navigating a geopolitical environment far more turbulent than the one that shaped their post-Cold War outlook. The international order that underpinned decades of prosperity – based on open trade, predictable rules, and expanding global integration – is under strain. Intensifying great-power rivalry, technological competition and the increasing weaponization of economic interdependence have exposed vulnerabilities for globally connected middle powers.
Carney has taken the lead in a middle power push to shape the new rules, rather than simply succumb to emerging global conditions that are disadvantageous. For this to be impactful, it requires a coordinated effort from countries with stable institutions, credible diplomacy, and broad networks of partners who can convene to influence outcomes beyond their individual weight.
Australia and Canada both occupy precisely this space, but the challenge is now to convert credibility into practical cooperation.
One of the clearest signals to emerge from discussions between Carney and Australia’s prime minister, Anthony Albanese, is in economic policy. The two governments agreed to establish regular coordination between economic ministers and regulators across finance, industry, taxation, and investment. This reflects a shift in thinking in making coordination between economic ministries similar to how defense ministers would meet.
The central area of convergence is in critical minerals. Australia and Canada are among the world’s leading producers of resources essential to the modern technological economy, including lithium, uranium, nickel, and rare earth elements. These minerals underpin supply chains for semiconductors, electric vehicles, renewable energy systems, and advanced defense technologies. Yet the processing and refinement of many of these materials remains highly concentrated in China, creating strategic vulnerabilities for democratic economies.
By aligning investment frameworks, standards and downstream processing capabilities, Australia and Canada hope to build more resilient supply chains anchored among trusted partners. Canberra’s decision to join the G-7 critical minerals alliance also highlights this intent. Rather than simply exporting raw materials with current market incentives, Australia and Canada are positioning themselves to help shape the architecture of emerging energy and technology markets.
This approach reflects an emerging strategy among middle powers known as “values-based realism”: maintaining a commitment to democratic norms and open markets while strengthening the material capabilities that protect sovereignty. In practice, that means building dense networks of cooperation in the sectors that will define geopolitical influence – advanced technologies, data infrastructure, and secure supply chains.
This expands into greater security cooperation. The two countries have been adapting Australia’s over-the-horizon radar technology for the Arctic region, and hope to expand this collaboration further with the recent release of Canada’s first defense industry strategy, and the commonalities it may find with Australia’s own efforts to increase its defense technology innovation and production. More broadly, the two countries agreed to establish regular defense ministerial meetings, expand military interoperability and explore mechanisms such as a status of forces agreement. This is not quite a formal defense alliance, but is an improvement on previous ad-hoc arrangements.
The broader significance lies in what this evolving partnership represents for middle-power strategy. For much of the period since World War II, countries like Australia and Canada engaged the world primarily through multilateral institutions and as part of coalitions led by the United States. Rather than abandoning such arrangements countries are adapting, with those that have decent capabilities supplementing the limitations of these institutions by working together to solve immediate problems and strengthen their resilience.
A wholesale economic and security transformation of the Australia-Canada relationship to match the two countries’ commonalities was unlikely from Carney’s visit, but there has been a clear recognition that there is vastly more cooperation they should be engaged in, particularly as Canada seeks to expand itself into the Indo-Pacific. The visit has established enough new mechanisms to drive the relationship forward, and give greater practical structure so shared values can be converted into shared purpose.
