Diversifying Canada’s economic strategy is essential in an era of tariff escalation and growing geopolitical volatility. Stellantis’s recent announcement that it’s heading south sent another Arctic chill to concerns over Canada’s industrial future. Billions in public subsidies are flowing to foreign multinational automakers, yet questions remain: Who benefits? What regions are being prioritized? And what kind of innovation are we actually funding?

Last week Stellantis, formerly Chrysler, confirmed it would shift planned Jeep Compass production from its Brampton, Ontario plant to Illinois, part of a $13 billion expansion south of the border. The move has been widely viewed as a response to escalating tariffs and direct pressure from Washington. Doug Ford called for “economic retaliation” against the US, blaming Donald Trump’s protectionist push for undermining Canadian jobs.

With 3,000 Brampton workers already laid off and fear rippling through Ontario’s auto belt, the episode underscores how vulnerable Canada’s industrial future remains to American leverage, and how little control Ottawa retains despite billions in public subsidies.

In the face of the inexorable pull of American interests and power, the federal government still continues to seek ways to sweeten Stellantis’s pot to keep them in our backyard. However, more long-term policy concerns need to be addressed. This moment demands more than reactive pursuit of foreign investors—it calls for a proactive, public-led strategy that serves national development, regional equity, and visionary innovation.

The north remembers

The latter part of the 19th century was marked by two major pressures on Canada’s young struggling, but resource-rich, economy: the first era of massive economic globalization coupled with intense American protectionism. Facing the challenge of massive US tariffs, the resolute response of one Canadian MP stands out. In an 1891 speech delivered to an American audience, former cabinet minister Joseph-Adolphe Chapleau stated that that American tariff policies have “done us good” causing us “to realize that we stand upon our own feet” rather than leaning for support upon the United States.

The federal government under John A. Macdonald introduced a National Policy committed to building the Canadian economy and strengthening its east-west connections. The policy was a mixed blessing. One study of this period demonstrates that Canada’s trade policies were a calculated strategy that did have some benefits in boosting domestic manufacturing, GNP, and employment. On the negative side, though, tariff policies designed to promote domestic economies tended to be selectively applied in supporting industries in politically influential regions, particularly in urban centres in Ontario and Québec. While the National Strategy did help to shape Canada’s industrial geography and foster national economic development it also fed regional disparities and entrenched a neoliberal framework that hampered the ability of future governments to constructively shape a strong economic future.

Today, we face a similar inflection point. The Stellantis deal reflects short-term political optics, but it clearly lacks the kind of strategic depth and vision required for transformative national economic planning. Canada’s innovation strategy must move beyond cap-in-hand deals for multinationals seeking lucrative corporate handouts. If Canada is serious about building resilient regionally-inclusive manufacturing capacity rooted in domestic expertise and northern innovation, it requires a democratically accountable industrial strategy that serves long-term public goods, not just corporate interests.

In one sense, jeep production in Canada makes some sense given our context—rugged vehicles for a rugged country. Canada’s north and remote regions face unique challenges: rough terrains, extreme climate variations, fragile infrastructure, and limited mobility. But what about rugged northern vehicles designed by Canadians and for Canadians, shaped by innovative R&D, and adapted to wide variations in our changing climate and for use across an array of terrains? Such vehicles could find markets, not only domestically, but in other countries facing similar challenges across a vast array of regions worldwide.

History has demonstrated that we have the capacity and expertise to deliver. Canada rapidly built up remarkable industrial and military supply capacity during the Second World War. However, in the wake of those accomplishments governments have largely dropped the ball in building and sustaining a domestically anchored industrial and military supply industry. Successive federal administrations, Liberal and Conservative, have repeatedly outsourced key procurement decisions, undermining national capacity and strategic autonomy.

John Diefenbaker’s abrupt cancellation of the Avro Arrow in 1959 stands as one of the most consequential missteps in Canadian industrial history. The decision not only scrapped a cutting-edge fighter jet program but also dismantled the development of a thriving aerospace industrial complex, sending engineers and innovation southward to the US and abroad. Justin Trudeau’s 2023 decision to bypass competitive bidding in favour of a sole-source deal with Boeing for P-8A Poseidon surveillance aircraft echoed this pattern. Despite Bombardier’s offer of a proven and innovative Canadian-built alternative, the government opted for foreign procurement, citing interoperability and urgency.

Bombardier Defense has delivered over 500 special mission aircraft with its Challenger and Global platforms already serving diverse militaries in roles ranging from surveillance to strategic transport. The company has engineering depth, production infrastructure, and operational track record. Turning to Bombardier would have strengthened national security by reducing reliance on foreign suppliers, creating high-value jobs in aerospace and defense across Québec and Canada, and fostering innovation in cold-climate and multi-role aircraft tailored to Canadian geography. The decision once again sidelined domestic expertise and an internationally recognized innovator in military defence. Instead of investing in Canadian firms, our politicians bowed to external pressures and short-term convenience over long-term capacity.

Building on northern resilience

Canadian trade policy has helped shape Canada’s industrial geography and foster long-term development, not through laissez-faire market forces, but through deliberate, state-guided investment in national capabilities. One major Canadian company is a striking example of this legacy. In the 1930s, Joseph-Armand Bombardier, a mechanic from Valcourt, Québec, began experimenting with snow-going vehicles in the wake of the death of his two-year old son who couldn’t be transported to life-saving medical care due to a frigid winter blizzard. Responding to this tragedy, Joseph-Armand’s goal was to create a reliable vehicle that could traverse deep snow and remote terrains.

Bombardier’s early innovations—the B-7 snow bus and tracked vehicles for forestry and mining—were lifelines for northern communities. Designed to traverse deep snow, frozen lakes, and remote terrain, they were built for the realities of Canadian winters, isolation, and its geographical expanse. During the Second World War, Bombardier worked with the government in producing specialized vehicles for northern military operations. In the post-war era, Bombardier’s Ski-Doo became the first mass-produced lightweight snowmobile, revolutionizing winter transportation and recreation. This enterprise offered a form of northern public service that became a major commercial success.

Over the last generation, Bombardier has been battered by predatory pressures from major foreign multinationals like Airbus and Boeing, companies heavily subsidized by their own governments, a litany of short-term political calculations by federal and provincial governments, as well as its own succession and governance challenges. These factors have led to major divestments of Bombardier’s once successful operations in recreational vehicles, rail and commercial aviation including its highly respected CSeries.

When the CSeries was breaking into the market, it needed a credible carrier to adopt it. In the early 2010s, Porter Airlines, a regional carrier based in Toronto, saw a transformative opportunity. It planned to purchase Bombardier’s CSeries jets in order to expand its network across North America. The aircraft’s quiet operation and short-runway capability made it ideal for Billy Bishop Toronto City Airport, located on a small island just off downtown Toronto. Porter’s ambitious plan hinged on two very modest changes to the airport hub: extending the runway by a few hundred metres and lifting a ban on jet aircraft, originally imposed due to noise concerns from older jet models. Bombardier’s CSeries was noted for its exceptional noise reduction, making it much quieter than the most of turboprops already operating at Billy Bishop. It was also more fuel-efficient and environmentally friendly. In short, an ideal fit for Porter’s vision of a major airport hub to anchor its North American expansion.

Despite its technical and commercial merits, the proposal faced intense local opposition. In 2015, Transport Minister Marc Garneau rejected the expansion, citing public resistance and fearing potential loss of votes in the Toronto region. This decision effectively grounded Porter’s CSeries ambitions and dealt a fatal blow to Bombardier’s efforts at securing a high-profile North American launch customer. An aggressive campaign by Boeing and mounting financial pressures on Bombardier eventually led to the capture of its innovative CSeries by Airbus. It was handed over to the French multinational for the price of $1. The CSeries, renamed A220, is now a global commercial success. While the convoluted tale of Bombardier’s corporate journey over the last few decades and the equally complex history of its major technological innovations could fill many more pages, the CSeries saga underscores how short-term regional politics can seriously undermine sustainable national economic development.

If Canada is serious about building resilient, regionally inclusive manufacturing capacity, then companies like Bombardier—rooted in domestic expertise and northern innovation—deserve a role in a democratically accountable industrial strategy. Such a strategy would not be about propping up legacy firms for sentimental reasons. It would be about investing in technologies that serve public needs. A social democratic policy with Canadian-based companies like Bombardier would require transparency, accountable governance, and shared benefit to ensure that it’s not a form of corporate welfare, but democratic industrial policy aimed at promoting competitive economic innovation as well as serving the public good. This would require strategic public investment tied to clear economic and social outcomes, forward-looking oversight boards, profit-sharing models, anti-offshoring clauses, and regional benefits agreements embedded in any arrangement.

The Stellantis deal may have seemed to be political win, but it fails to contribute to any sustainable made-in-Canada national economic strategy. The simple focused maxim that drove Joseph-Armand’s innovation and enterprise—“find a need and fill it”—needs to drive national policy. With the right public-private partnership anchored in transparency, regional equity, and worker participation, a company like Bombardier could become a platform for Canadian ingenuity in the production of Canadian-made rugged, low-emission vehicles adapted northern, sub-Arctic and Arctic regions.

Canada needs an industrial vision that keeps the north strong, addresses real public needs, and builds innovative technologies for the world we’re entering—not the one we’re leaving behind. Winter is coming, and Canada must be ready to build strong in and for the north.

Daniel Cere is Associate Professor of Religion, Ethics and Public Policy in the School of Religious Studies at McGill University.