Canadians have long looked away from their often gruesome southern neighbor, tempted instead to embrace a chicer European identity. They could point to a more civil public culture, greater bilingualism and a more generous welfare state, compared to the dog-eat-dog reality of the United States. Prime Minister Mark Carney has called Canada “the most European of non-European countries,” and some policy wonks now advocate joining the EU.
Author Phil Resnick, in his recently published book, The European Roots of Canadian Identity, embraces an idea popular among some Canadians that Europeans form the base of the country’s identity, and its most crucial way to distance itself from its noisy neighbor. I guess he didn’t check in with the multicultural lobby.
Europhilia has been reinforced by Donald Trump’s moronic “51st state” rhetoric, as well as his more understandable concern with Canada’s protectionist policies. Trump managed to implant himself in Canada’s brain, leading some to look across the Atlantic for succor.
Many Canadians, particularly on the left, worship Europe and see it as a role model, but perhaps it’s time to assess the reality. Europe may be more “progressive” than America, particularly under Trump, but is it also a model for economic and social progress?
Economic and Innovation Gap
When it comes to opportunity and innovation, the U.S. model performs far better. A look at the data tells a very clear story. Over the past 15 years, the Eurozone economy grew about 6 per cent, measured in dollars, compared with 82 per cent for the U.S., according to International Monetary Fund data. Canada’s rate has become increasingly European in its economic profile rather than American. To put it another way, the most powerful economy on the continent is barely the size of that of my adopted home state of California. Since 2019, Europe’s productivity per hour worked grew by less than 1 per cent, but U.S. productivity grew by six times that amount.
The most obvious weakness lies in tech. Of the top 50 tech firms, only three are located on the continent — Canada has one, Shopify. Instead, the list is dominated largely by the United States with China a firm second. Apple, itself, is worth more than countries like Mexico, Brazil, Russia, Italy, and Canada. U.S. predominance also extends to a potentially huge space industry, a dominant force in the future. Overall, the U.S. has a larger space industry than the rest of the world combined.
Entrepreneurial Decline
This entrepreneurial gap extends across the economy. MIT researcher Andrew McAfee has revealed how, within the last 50 years, the U.S. created “from-scratch” companies with a market cap over $10 billion — five times the rate of the EU. At the grassroots level, as American entrepreneurs have flourished and self-employment has grown, in Europe, these have actually declined.
Energy Self-Harm and Industrial Decline
Since the Russian invasion of Ukraine and now with the Iran war, this weakness has become ever more obvious. The great bastion of European competence, Germany, is being undermined by climate catastrophism, leading to what one observer called “energy suicide.” Germany is now losing much of its industrial base, notably in chemicals and autos. The vaunted smaller mittlestand are failing in large part due to high energy prices and a diminishing workforce. Germany’s entire industrial structure seems likely to decline, and could lose upwards of 400,000 of its estimated 800,000 auto jobs by 2030. Here’s a sign: McKinsey recently advised Volkswagen to close eight of its ten German plants.
Europe’s sluggish economy, energy self-harm and creeping authoritarianism make it a terrible alternative to U.S. dynamism. Canadians must stop romanticizing a failing Europe and instead look to the innovative and opportunity-rich model south of the border.
