We are entering a new global arms race, not defined solely by weapons but by control over energy,

critical minerals

and the

infrastructure

required to power one of the most consequential technologies in human history:

artificial intelligence

(AI).

The United States understands this dynamic and is undertaking deliberate efforts to ensure reliable inputs for industrial‑scale computing, electrification and national security in order to protect its leading position in this AI‑driven world. While you may disagree with the U.S. administration’s tactics, they are nonetheless actively securing transportation corridors such as the Suez Canal, exerting influence around the Strait of Hormuz and looking north to the Arctic. They are also working to lock in energy and resource access in the Americas through Venezuela and Cuba and in the north through Greenland.

Canada, by contrast, sits on an extraordinary endowment of energy and critical minerals, yet has chosen a different path. Development has been constrained by layers of regulation and policy uncertainty, while carbon neutrality has become the organizing principle and focal point of economic policy. This approach has not meaningfully changed under Prime Minister

Mark Carney

’s leadership and may, in fact, be reinforced.

The tone has improved and the rhetoric is more reassuring but the underlying rules and regulatory barriers that deter capital remain largely intact. The outcome is fairly predictable. Investment will continue to flow elsewhere, supply chains will form without us and strategic relevance will erode quietly while we congratulate ourselves on intentions rather than outcomes.

This dynamic is best understood through an unsettling analogy. In 1995, McArthur Wheeler robbed two banks in Pittsburgh without a mask or disguise, convinced that lemon juice applied to his face would render him invisible to security cameras. Lemon juice, after all, can be used as invisible ink. He even smiled directly into the cameras. He was arrested within an hour and when shown the footage, his response was not denial, but disbelief: “But I wore the juice.”

Wheeler’s failure was a profound misreading of reality. He mistook an unrelated phenomenon and a comforting assumption for evidence. His case later inspired what became known as the Dunning-Kruger effect, the tendency to overestimate competence precisely when understanding is weakest.

Canada risks exemplifying the Dunning-Kruger effect. We are acting as though good intentions and aspirational net‑zero targets provide sufficient protection in an increasingly competitive and unforgiving global system. It is worth asking whether countries such as China and India, or even Europe, are prioritizing carbon‑neutral energy in the midst of an Iranian oil crisis, or whether energy security and affordability have once again moved to the forefront.

This disconnect is underscored by the federal government’s recent request that oil producers release reserves to support the International Energy Agency’s plan to inject 400 million barrels of oil into the market. The request reflects confidence that is completely divorced from operational reality. After a decade of government policy decisions that cancelled major pipeline projects and constrained investment, Canada no longer has the infrastructure or spare capacity to materially increase supply. The assumption that meaningful volumes can simply be “released” reveals a fundamental misunderstanding of the very system those policies have weakened.

Confidence untethered from results does not make us invisible to consequences. It merely delays recognition of them, and by the time the evidence is undeniable, the opportunity has already passed.

Fortunately, there are practical steps individual Canadian investors can take to protect themselves from all this. One is to avoid owning long‑term

Government of Canada bonds

that are vulnerable to rising rates and a weakening domestic economy. If fixed-income exposure is required, high‑quality corporate bonds and structured notes may offer a more attractive risk‑reward profile.

Second, portfolio exposure within Canada should be tactical rather than complacent, with an emphasis on sectors likely to benefit from aggressive top‑down federal spending, including infrastructure companies with strong government relationships. Holding gold or high‑quality gold producers can also serve as a hedge against the long‑term debasement risks associated with persistent fiscal and monetary expansion that isn’t backstopped by resource growth.

Finally, investors should be thoughtful about their real estate exposure, particularly when it represents a disproportionate share of net worth or is expected to fund a significant portion of retirement. This includes your own home, rental properties and especially Canadian-focused private mortgage and real estate funds as an investment.

In a world that is moving faster, allocating capital with greater strategic intent and protecting wealth increasingly depends on clear vision and hard evidence because no amount of lemon juice, however confidently applied, can make us invisible to reality.

Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus.

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