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This is the 50th anniversary year of the G7, and when its leaders meet in Alberta next month, many will wonder if the group has another 50 years in it.
Their finance ministers may have the same questions this week when they meet in Banff, asking if the champions of democratic capitalism can overcome a tariff war, threats of stagflation and growing concerns about the U.S. debt.
The fate of democratic capitalism may hang in the balance.
I spent part of last week in Ottawa, with a group called the B7, made up of business leaders from across the seven leading democratic economies, and didn’t come away feeling enthusiastic about the West’s great project. Since 1975, when the world was struggling with oil shocks and monetary crises, the G7 has helped maintain economic and financial stability. Most of the heavy lifting was done by the U.S., with assists from Germany and Japan, but the coordination of economic and monetary policy across the broader group was essential, too.
Now that’s fading. You just need to look at Donald Trump’s visit to the Persian Gulf last week to see how much capital’s centre of gravity has shifted. China and Latin America are laying claims, too.
And if trade follows geopolitics, we can expect more disruption to come.
So what can the G7 do? Perhaps develop new ways to generate, attract and reinvest capital.
For too many years, the public and private balance sheets of the leading democracies have focused on short-term objectives. Meanwhile, the non-democratic world has amassed capital for decades-long projects.
With their economies struggling and debts growing, G7 countries now face a $15-trillion infrastructure gap, to rebuild supply chains, expand production of critical minerals, develop capacity for AI-powered economies, and decarbonize energy systems.
Canada can help shift the alliance’s thinking to those longer-term needs. That won’t be easy given political tensions between the Trump administration and most of the G7 allies. But with U.S. engagement, the G7 can create new approaches for democratic capitalism, including:
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coordinated investments across countries.
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more institutional capital for priority projects.
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preferential approaches to procurement.
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joint approaches to procurement, especially of energy, advanced technologies and critical minerals.
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shared standards, measurements and principles.
You can read the B7 group’s final communique here.
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