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By EnergyNow Editorial Team
For decades, Canada’s place at the G7 table has symbolized its status as one of the world’s leading industrialized democracies. Yet a growing number of economists and policy analysts are asking a difficult question: if the G7 were created today, would Canada still receive an invitation?
That question was recently raised by economist and University of Calgary School of Public Policy President’s Fellow Jack Mintz in a Financial Post commentary examining the changing balance of global economic power. Mintz argues that the world has changed dramatically since the G7’s creation in 1975, and unless countries such as Canada, Japan and several European nations improve their economic performance, the group’s relevance—and perhaps its membership composition—could eventually be challenged.
His warning comes at a time when global power is increasingly concentrated in two countries: the United States and China.
A Club Created for a Different Era
The G7 traces its origins to the economic turmoil of the 1970s. Following the 1973 oil embargo and the collapse of the Bretton Woods monetary system, the world’s leading industrialized democracies formed what was initially the G6: the United States, the United Kingdom, France, West Germany, Italy and Japan. Canada joined the following year, creating the G7.
At the time, membership broadly reflected the world’s largest advanced economies.
Today, however, the global economic landscape looks very different.
As Mintz notes, the United States remains the world’s largest economy with a GDP exceeding US$32 trillion. China has firmly established itself as the world’s second-largest economy at approximately US$21 trillion. Together, the two countries account for more than 40 per cent of global economic output.
Meanwhile, emerging economies have surged up the rankings. India has become one of the fastest-growing major economies in the world and is now approaching the size of Japan and Germany in economic output. Brazil has overtaken many traditional industrial powers in terms of population, resource production and geopolitical influence.
Canada, by contrast, has gradually slipped down the global rankings. With a GDP of roughly US$2.5 trillion, Canada now trails the United States, China, Germany, Japan, the United Kingdom, India, France, Italy, Russia and Brazil.
Mintz observes that if membership were determined strictly by economic size today, countries such as China and India would almost certainly be included, while Canada’s position would be far less secure.
Economic Growth Matters
The challenge facing Canada is not merely one of relative size.
The larger concern is that Canada has struggled with productivity growth for more than a decade.
According to data from the Organisation for Economic Co-operation and Development, Canada’s productivity growth has consistently lagged many peer nations. Business investment per worker has declined, capital investment has weakened, and labour productivity has stagnated.
The result is increasingly evident in international comparisons.
Canadian GDP growth has often been supported by population growth rather than gains in productivity. While immigration has expanded the labour force, output per worker has failed to keep pace with leading economies.
The Bank of Canada, numerous business groups and provincial governments have all warned that weak productivity represents one of the country’s most significant economic challenges.
Without stronger investment, innovation and infrastructure development, Canada risks falling further behind nations that are aggressively pursuing economic growth.
The Rise of India
Perhaps the most striking development since the G7’s formation has been the rise of India.
With a population exceeding 1.4 billion people and annual economic growth rates that often surpass those of most advanced economies, India is increasingly viewed as a future economic superpower.
India’s growing influence is already evident in international forums such as the G20, where it has become a major voice on trade, energy security and global development.
Many analysts believe that if the G7 were ever expanded or restructured, India would be among the first countries considered for permanent inclusion.
Unlike many developed nations facing aging populations and slower growth, India benefits from a young workforce, rapidly expanding manufacturing capacity and significant infrastructure investment.
For Canada, India’s rise highlights the increasingly competitive nature of the global economy.
Military Power Is Also Reshaping Global Influence
Economic output is only one measure of global influence.
Military capability increasingly shapes international relationships as geopolitical tensions rise.
Mintz points out that the United States spent nearly US$1 trillion on defence in 2024, far exceeding every other nation. China’s military spending has risen rapidly, while Russia continues to devote significant resources to defence despite economic challenges.
The war in Ukraine, growing tensions in the Indo-Pacific and instability in the Middle East have prompted NATO countries to increase military expenditures.
At the recent NATO Summit and subsequent alliance discussions, member countries faced increasing pressure to meet or exceed defence spending targets.
Canada has long faced criticism for failing to reach NATO’s benchmark of spending 2 per cent of GDP on defence.
While Ottawa has recently announced plans to increase military spending, the financial commitment required to meet alliance expectations will be substantial.
As Mintz notes, higher defence spending ultimately competes with other government priorities such as healthcare, social programs and infrastructure investment.
Why Energy Security Is Bringing Canada Back Into Focus
Ironically, while Canada’s economic rankings have slipped, its strategic importance may actually be increasing.
The global push for energy security following Russia’s invasion of Ukraine, combined with rising geopolitical tensions in the Middle East, has renewed interest in stable and democratic energy suppliers.
Canada possesses the world’s third-largest proven oil reserves, vast natural gas resources, abundant uranium, critical minerals and one of the world’s cleanest electricity systems.
Recent developments including LNG Canada, expanded pipeline infrastructure and growing international demand for liquefied natural gas have strengthened Canada’s position as a reliable energy supplier.
Several analysts have argued that Canada’s resource base gives it geopolitical influence disproportionate to its population size.
In a world increasingly focused on energy security, food security and supply-chain resilience, Canada’s natural resource wealth remains a significant strategic advantage.
The question is whether policymakers can translate that advantage into stronger economic growth.
Investment Is Returning – but Will Canada Capitalize?
Recent comments from investors, energy executives and economists suggest international capital is once again paying attention to Canada.
Growing concerns over geopolitical instability, coupled with Canada’s stable legal system and vast resource potential, have improved the country’s attractiveness relative to some competing jurisdictions.
Yet investors continue to raise concerns about regulatory complexity, project approval timelines, taxation uncertainty and infrastructure constraints.
Many business leaders argue that Canada has a narrow window of opportunity to attract major investment in energy, critical minerals, manufacturing and technology.
Failure to improve competitiveness could allow capital to flow elsewhere, particularly to the United States, which continues to attract significant investment through pro-growth industrial policies and faster project approvals.
A Warning Canada Should Take Seriously
The G7 is unlikely to expel members anytime soon. The organization remains as much a political and strategic alliance as an economic one.
However, Mintz’s broader point deserves attention.
Global influence is increasingly determined by economic strength, productivity growth, military capability and strategic relevance. Countries that fail to grow eventually lose influence, regardless of their historical status.
Canada remains one of the world’s most prosperous nations, blessed with extraordinary natural resources, a highly educated workforce and strong institutions. Yet those advantages alone do not guarantee future leadership.
If Canada wants to remain a leading voice among the world’s most influential nations, it must focus on improving productivity, attracting investment, building critical infrastructure and strengthening its competitive position in the global economy.
Otherwise, as emerging powers continue to rise, Canada may find itself in the uncomfortable position of watching from the sidelines while others shape the future of the international order.
The Bottom Line
Jack Mintz’s warning is ultimately not about the future of the G7 itself. It is about Canada’s future place in the world.
The country’s seat at the table has never been guaranteed. It has been earned through economic strength, strategic importance and international leadership.
Maintaining that position will require renewed focus on growth, competitiveness, energy development and national productivity. If Canada succeeds, it can remain a leading voice among the world’s major economies. If it does not, the question may eventually become impossible to ignore:
If the G7 were created today, would Canada make the cut?
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