If you ask David L. Cohen, the relationship between Canada and the U.S. is the envy of the world. “Every other country in the world would trade our relationship with their relationship with their most important ally,” said the U.S. ambassador to Canada on Tuesday at the U.S.-Canada Summit in Toronto. 

The day-long event, hosted by Eurasia Group and BMO, brought together hundreds of business leaders, economists and policymakers to take stock of the two allies’ relationship and discuss how their friendly foundation can benefit in a world that’s poised for less globalization and what could be persistently higher interest rates. 

The day’s big themes were the state of globalization, the green-energy transition and the carrots and sticks that will clinch North America’s dominance in a rocky global economy. Here are some of the key highlights: 

Shots fired at the Inflation Reduction Act: In a session with his Canadian counterpart Kirsten Hillman, Cohen defended the sweeping U.S. strategy to fight climate change, which stakeholders in Canada have criticized as threatening Canada’s ability to compete against its giant neighbour. “There are many people in Canada who don’t love the IRA,” he said, adding that many also don’t “fully understand” it. The US$369-billion initiative isn’t at all protectionist, Cohen argued, noting that Canadian companies are also eligible for its incentives. If the act works, he said, Canada will be a major beneficiary. 

Hillman, meanwhile, said the IRA forced Canada to react and devise its own plan—which came in the form of the Canada Growth Fund and other tax incentives introduced in the federal budget earlier this month. 

The case for strategic deglobalization: Cohen and Hillman both pushed back against the idea that globalization is coming to an end. “I don’t think that’s going to happen anytime soon because it’s too deeply entrenched,” said Hillman. “What is happening is a strategic realignment in specific sectors in order to deal with particular vulnerabilities that we have started to understand, and unravel a bit of willful blindness we have had.”

Now’s the time to grow deep roots: While both Hillman and Cohen agreed the strong relationship between Prime Minister Justin Trudeau and President Joe Biden is good for their respective economies, they said it’s important to lay the groundwork for a future in which the countries’ leaders may not be as friendly. “I think it’s essential that we seize this moment and that we do the most with it while it exists,” said Hillman, pointing to potential in joint economic and R&D projects. “When our countries’ vision isn’t aligned, it’s not like we don’t get things done, but there could be an opportunity right now to supercharge some activities.”

Elsewhere at the summit: 

• In a panel hosted by my colleague Anita, Nazak Nikakhtar, a U.S. international trade and national security lawyer, floated the idea of intellectual property sharing between allies to accelerate innovation in the critical minerals space. 
• Geopolitics is changing everything about investing, said Mark Wiseman, outgoing chair of the Alberta Investment Management Corporation. “I’ve been a globalist. I wish we didn’t have the geopolitical issues that we have. I wish that I could diversify my portfolio more easily globally. But right now, given the risks and return opportunities, there’s no place like home.”
• Tom Donohue, former CEO and president of the U.S. Chamber of Commerce, praised Canada’s immigration system for helping attract skilled talent. “Making things work better in the United States, is to face up to immigration,” he said. “Otherwise, we’ll have all the smart things you guys are all talking about, and nobody to do it.”