We are living through a break in the international system that many had assumed would never occur. As Prime Minister Carney noted in his speech at Davos, longstanding assumptions about the value of restraint, predictability, and shared rules are giving way to a more exposed reality where power is exercised openly, and major players increasingly act without meaningful limits.

This shift does not mean countries like Canada are helpless. Middle powers do not have to drift at the mercy of larger forces. We have agency if we are prepared to see the world clearly and respond with intention.

For Canadians, these global shifts show up in the rising cost of groceries, the price of essentials, and the worries many families feel about whether their paycheques will stretch far enough. Trade wars, pandemics, conflicts, and climate change have interconnected consequences for markets. When they do, households bear the costs first.

That is why the Groceries and Essential Benefit is so important. It is targeted, direct support for those most affected by rising food and household costs, including seniors, low-income families, and people living paycheque to paycheque.

To this end, our government will provide one-time top-up payment, equal to a 50 per cent increase this spring under this benefit. This measure alone will put money back into pockets at a moment when costs remain high. Affordability, however, is not a short-term challenge. That is why we are also introducing a 25 per cent increase to the benefit for five years.

When international disruptions push prices higher, governments must decide whether to stand back or to step in. Strong communities are built when people have the security to meet their basic needs, and we have a responsibility to meet this moment. However, resilience is not only about cushioning shocks, but also positioning Canada and our economy for the future.

At Davos, one theme was consistent: the need to secure the industries that will define the next generation of growth. The sectors that have powered Ontario’s economy for decades are now undergoing rapid change and challenges. Countries that fail to anchor their key sectors at home risk becoming dependent on others for jobs, innovation, and supply chains.

Canada’s new Automotive Strategy reflects this reality. Our auto sector supports hundreds of thousands of workers and underpins much of the economy across southern Ontario. As tariffs impact the sector, the question is not whether change will happen, but where it will happen and who will benefit.

That is why the Strategy commits $3 billion through the Strategic Response Fund to help manufacturers modernize, diversify into new markets, and keep production in Canada. These investments are reinforced by targeted tax measures designed to encourage long-term capital investment and plant renewal.

But anchoring production also means ensuring there is a strong domestic market for what we build. To strengthen demand and make electric vehicles more accessible, the government will provide incentives of up to $5,000 for electric vehicles, and up to $2,500 for plug-in hybrids.

To support Canadian workers and manufacturers, vehicles made in Canada will not be subject to the same price caps applied to imports, ensuring domestic production is rewarded.

Competitiveness in a contested global economy requires both openness and protection. Canada is strengthening its automotive remission framework to reward companies that invest and produce here, while maintaining counter-tariffs on U.S. auto imports to preserve a level playing field. At the same time, we are diversifying trading relationships and deepening cooperation with partners such as South Korea and China that will drive investment into our communities.

There is a direct connection between industrial strategy and affordability. Stable, good-paying jobs support household incomes. Strong domestic industries contribute to predictable growth. And predictability matters when families are trying to plan their futures. These policies reinforce one another and are part of the same response to a more uncertain global environment.

What Davos made clear is that middle powers must define a new path forward as power is being exercised more openly, competition is more intense, and supply chains are increasingly strategic. In this environment, remaining pragmatic and principled is our responsibility.

Canada cannot control every force acting upon us. But we can choose how we respond. We can support people when costs rise. We can invest in industries that secure our future. We can build resilience at home so that we have options when conditions change.

We may not command the scale of the world’s largest powers. We do not dictate terms or set global policy on our own. But we have something too, the capacity to not pretend, to name reality, to build our strength at home and to act together.

Iqra Khalid is the Liberal Member of Parliament for Mississauga–Erin Mills, first elected in 2015. She advocates for youth opportunity, newcomer success, and a stronger Canadian economy.

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