By David McKinnon

March 16, 2026

MELBOURNE — Mark Carney’s recent visit to Australia signalled a shift from an amiable and multilayered but underappreciated relationship to one with genuine strategic potential.

After years of what might be described as bilateral benign neglect, Mr. Carney’s visit—coming as it did on the heels of his middle-power-solidarity Davos speech and bolstered by his preexisting international reputation as a central banker—felt like more than a reset.

The Canadian prime minister was described as a “rock star” by Michael Fullilove, head of the Lowy Institute in Sydney. The Australian prime minister, Anthony Albanese, was also effusive. It’s hard to imagine previous Canadian prime ministers receiving such accolades in Australia.

It’s useful to reflect on why, and to understand the differences in outlook and style of the two countries given our notable echoes in governance, wealth, and population, and what has changed. There are few countries better placed to learn from each other, and to collaborate for mutual—and potentially global—benefit in this rapidly changing world.

As a veteran of the Canada-Australia relationship, and Canada’s relations with the Indo Pacific more broadly, I am not accustomed to seeing a Canadian prime minister being lauded by Australians for serious leadership on the challenges of the day, including by those with skeptical views of Canada’s efforts in the region.

But this is about a ruptured world buffeting previously comfortable middle powers, an insightful Mr. Carney, and his willingness to speak in a straightforward, almost un-Canadian way (except perhaps to Canadians, as I wrote recently in Policy.)

During this trip, investment was naturally central to the agenda of the banker-turned-prime minister, as it was during the India and Japan legs of the Indo-Pacific trip. The Australia visit produced a set of outcomes reflecting the unusual breadth of the relationship.

Among these: Cooperation on critical minerals and artificial intelligence will build on already extensive business and investment ties, including the emerging Australia–India–Canada Technology and Innovation Partnership. Defence cooperation also featured prominently, with early progress on collaboration using innovative Australian over-the-horizon radar technology to strengthen surveillance in Canada’s Arctic.

Public policy collaboration may also deepen through renewed engagement among senior officials via the Canada Australia Public Policy Initiative that, one hopes, can inspire much needed reform. Canada could, for example, draw inspiration (and lessons) from Australia’s history of ambitious and results-based approaches to reform and change as Ottawa seeks to do less with less

Deep links and affinities—official, business, and personal—have long existed between the two Commonwealth cousins, of course, but, even as we have cooperated effectively in various forums (e.g. Five Eyes), there has also been an element of studied indifference, as we each thought we had more important relationships to nurture.

The return of Donald Trump changed that. The welcome Mark Carney received and the substance to the joint statement with Anthony Albanese spoke of a different sort of engagement that can flourish and deliver economic and security benefits in the short and longer term to both countries.

Clear communication has not always been a hallmark of the relationship. Part of this is cultural. My Australian wife often recounts that she felt more culture shock on arrival in Ottawa as a diplomat than she had felt as a student in Thailand or while serving in Laos. In Southeast Asia, she expected things to be different.

In Canada, things seemed very similar, but the differences were both subtle and significant, especially in the way Canadians’ typical passivity (sometimes mistaken as politeness) could complicate understanding while Australians could be more straightforward in a way that made Canadians uncomfortable.

Given the macro similarities, however, it is the differences that make the relationship interesting as we have often faced similar domestic policy challenges and come to different prescriptions.

On the international front, our operating environments have been very distinct even if we have both been deeply committed to the ideals of the postwar liberal international order, drawing in part on our respective experiences in two world wars and our largely successful multicultural democracies. Our differences are driven by history and, particularly, geography, but also the nature of our domestic political systems.

Canadians now have our own variant of fear of abandonment from the U.S. in economic and security terms, though it is tempered by a more immediate fear of encroachment.

This is evolving. Canadians can appreciate the interest-driven world view of the Australians better now given that what I have described elsewhere as the “exorbitant privilege” of our geography and modern history has effectively ended. Our location is now as much a risk as an advantage.

That said, we will never suffer to the same degree from the often referenced Australian “fear of abandonment” (see Allan Gyngell’s 2017 book Fear of Abandonment: Australia in the World Since 1942) with origins in its early days as essentially an Anglo-Celtic society on the far side of the world, dependent on Britain for its security and prosperity.

As I recently wrote in Policy, when the British Empire in Southeast Asia collapsed early in the Second World War, and Australia’s plans for its defence from the region collapsed too, it turned quickly to the United States as its protector.

Australia spent decades reinforcing its alliance with Washington—sending forces to Vietnam and later the second Gulf War—while Canada often chose a different path. Elements of this have re-emerged as some voices are questioning the future of the AUKUS nuclear submarine deal and the ANZUS Treaty itself. Neither is under immediate threat, most observers think, but the angst is there.

Through this period, however, Australia also built from the ground up impressive relationships across the Indo-Pacific, responding to the economic opportunities and potential threats in the region in a way that has echoes in Mr. Carney’s pragmatism and “variable geometry”.

Canadians now have our own variant of fear of abandonment from the U.S. in economic and security terms, though it is tempered by a more immediate fear of encroachment.

The time is right for serious, open discussions about securing our respective places in this new world, and how effectively two successful democratic middle powers can work together.

Canada under Mr. Carney is openly talking—in a straightforward and unembellished way—about the hard interests at the heart of our engagement with the world, including with Australia. This resonates with Australians, quite apart from the impeccable timing of the Davos speech, the themes of which he returned to and built on in speeches in Australia, including to Parliament.

One could argue Mr. Carney’s thoughtful, pragmatic voice is all the more compelling given that he is a Canadian leader and the message is therefore unexpected among overseas audiences who are used to Canada’s international engagement being more about virtue transmission than substance. Whatever the reason, his message was well received.

The diffuse nature of power in the Australian federal parliament has tended to encourage lively debate while the high centralization of its Canadian counterpart tends to stifle policy contestation. The urgency of the current crisis should open the way in both countries for serious and effective changes in approach. And here we have a lot to gain from the high-level engagement going on, especially as it can inspire change throughout both systems.

In some ways, the private sector recognized the strategic value of the relationship long before governments did, given the substantial investment flows in both directions that date back decades. A lot of Canadian investment into Australia has been a proxy Asia play, offering Canadian investors a stable and predictable environment into which they could take advantage of, for example, the China boom.

According to Canadian official figures, in 2024, Canadian direct investment into Australia amounted to $58.8 billion while Australia’s direct investment into Canada totalled $27.0 billion. Australian figures suggest the stock of investment is multiple times that. Australia has long been one of our largest investment relationships in the Indo-Pacific.

Not surprising, then, to see highlighted in the prime ministers’ statement the Australia Canada Economic Leadership Forum, which since 2010 has involved senior players in the investment relationship and others in serious conversations about trade and investment, global security, foreign policy, economic growth, innovation and technology, energy, and education.

Canada and Australia have always had a special relationship at an operational level, with Canadians and Australians able to work side by side, including on intelligence and security matters, with a remarkable degree of trust.

But what has been missing is much attention among our leaders to the potential strategic importance to our collaboration. Cousins who are good friends, yes, but not quite cousin brothers (or sisters), to use a good South Asian expression. This can now change.

Combined with the threat the global environment poses to both countries, this more constructive dynamic to the Canada-Australia relationship has the potential to thrive, endure, and deliver serious benefits.

We are already seeing some early success. Continued bilateral leadership can encourage deeper engagement and action.

David McKinnon is a former Canadian diplomat who served in Bangkok, Canberra, New Delhi, and in Colombo, as Canada’s high commissioner to Sri Lanka and the Maldives. He is a senior fellow at the Asia Pacific Foundation of Canada.