Observations from Canada’s experience for the Icelandic context.
At the World Economic Forum in Davos, Prime Minister Mark Carney warned that the international system is undergoing a rupture – shifting from a rules based order that sought, however imperfectly, to govern state behaviour through norms, to a more traditional, power driven international landscape. One where great powers more openly and bluntly pursue their interests using their tools of statecraft to convince or coerce other states to align. These tactics could include weaponizing specific trade, finance and supply chains to turning broader security and economic interdependence into vulnerability for middle and small actors. In this new (old) world, if smaller states lack credible deterrent military power, resilient societies and productive and secure economies, we risk becoming objects of great-power competition rather than actors with agency within the system. While the Davos speech is focused on geopolitics and economics more than traditional defence spending or military strategy, security, autonomy and sovereignty are central themes – and the parallels are easily drawn.
For Canada and Iceland – countries that have benefitted from a system focused on rules rather than raw power – this framing captures an uncomfortable but clarifying reality.
In a more volatile and conflict-prone system, countries without access to credible hard power don’t just lose influence, they risk losing agency altogether. We may think we can stay safe by accommodating great powers’ interests and avoiding confrontation, but Prime Minister Carney warns that compliance will not buy safety. Going along to get along can make middle and smaller states more vulnerable to exploitation given the imbalance in economic and military might with larger powers, with “the pleasant fiction” of a rules-based system no longer in place with its buttressing guardrails.
So what is the way forward given this context?
Prime Minister Carney’s core message is that smaller and middle powers cannot passively adapt to the rupture – we need to actively reshape our position in the system. The most effective means to do so is to coordinate and act collectively. Not to try and get the most recent world order back, but rather to ensure that whatever new system comes about is one where smaller and middle powers are still able to defend their core national interests. To be clear, the suggestion is not that smaller and middle powers will be the ones shaping the system, but by banding together (including with those with hard power), a sufficient critical mass can be created that will necessitate great powers taking into account our interests. Otherwise, the outcome could be dire. In Prime Minister Carney’s now oft-quoted words – if we aren’t at the table, we’re on the menu.
Prime Minister Carney’s perspective provides a pragmatic and constructive path forward for smaller and middle states. It also brings to the forefront important questions such as what it means to be a credible ally and with whom middle and smaller states should seek to partner with and on what.
As all countries seek to navigate this new geopolitical reality, Canada’s approach to coalition building could serve to inform Iceland’s thinking and international relations approach.
While it goes without saying that Canada and Iceland are NATO allies and have shared interests as Arctic countries, we also both navigate a very close relationship with the United States, have acutely vital strategic geographies that adversary states would seek to access in war time, and have sparsely populated countries that make infrastructure and defence logistics complex.
PROXIMITY WITHOUT ILLUSION: THE RISE OF VARIABLE GEOMETRY
Canada and Iceland both live with a structural reality: a uniquely close relationship with the United States. For Canada, our geographic proximity has delivered significant security benefits and could certainly continue to do so in the future. But in a more contested and volatile strategic environment, Canada is pairing that relationship with a deliberate effort to broaden and deepen ties with a wider network of partners. This is not an either/or approach, but complementary – designed to build resilience, expand options, and reinforce collective stability. For Canada, these partnerships take the form of variable geometry: flexible, issue specific alignments that bring together different constellations of allies and partners depending on the challenge at hand.
At the core of both approaches is a simple principle: a credible partner or ally is a serious one that does not rest on assumed goodwill or ambiguity – rather it is one that demonstrates its credibility through visible investments, real capabilities, clear commitments and the will to act decisively when required.
Canada has been signalling this shift in concrete terms by accelerating the delivery of real, operational capabilities to strengthen Arctic security and continental defence, while reinforcing the foundations of its national power. Over the next five years, Canada is moving to field over the horizon radar systems to extend early warning coverage across its Northern and Arctic approaches alongside modernized NORAD command, control, and communications. It is also introducing new maritime patrol aircraft, airborne early warning capabilities, integrated air and missile defence systems, and enhanced undersea surveillance. At the same time, Canada is expanding and upgrading forward operating locations to support a more persistent, mobile, and scalable military presence across the Arctic.
These efforts are being reinforced by structural reforms to accelerate procurement and deployment for the defence sector and strengthen economic resilience, including the establishment of a Defence Investment Agency, publication of a Defence Industrial Strategy and setting up a Major Projects Office. The latter will streamline and accelerate the planning, approval, and delivery of complex infrastructure projects of national significance. Taken together, these steps reflect a clear focus on pace and scale: ensuring Canada can more rapidly acquire, integrate, and sustain the capabilities required to detect, deter, and respond to emerging threats.
A more capable Canadian military that is able to defend North America, the Arctic, and the North Atlantic reinforces Canada’s value within NATO and beyond. Canada’s approach to defending itself, pursuing its core interests, and engaging with NATO rightfully occur through the lens of our own geography, and how that geography shapes our national defence needs. Canada’s interests underline the utility of a focused ‘Canadian pillar’ within NATO that concentrates on defending the Arctic approaches to North America, as well as playing a leading role in securing the North Atlantic. This is why Canada is also rebuilding core capabilities through major investments in conventionally powered submarines, naval surface fleets, and advanced aircraft to enable Canada to contribute credibly across a range of operational frameworks.
These capabilities are not only national assets; they are contributions that can be integrated into different allied configurations as circumstances demand – whether through NATO, regional groupings, or ad hoc coalitions. In a variable geometry environment, such versatility is essential: the same capabilities must be able to underpin deterrence in the North Atlantic, support Indo-Pacific partnerships, or reinforce European security, depending on evolving needs.
For Iceland, which does not maintain a standing military, seriousness is demonstrated differently, but no less meaningfully. Iceland’s strategic value within NATO, particularly in the Greenland-Iceland-United Kingdom (GIUK) gap, gives it outsized importance in North Atlantic security. Its contributions – host nation support, air policing facilitation, infrastructure provision, situational awareness, and political reliability – are essential to alliance operations. Iceland’s ability to enable allied presence and movement, and to provide a stable and predictable operating environment, is itself a form of strategic capability.
In an era of rupture, proximity to great powers heightens both risk and responsibility. For countries like Canada and Iceland, being a credible ally is not about matching great powers – it is about consistently demonstrating that they can be relied upon when it matters most – and to a wide-range of partners. In these partnerships, allies are not simply seeking symmetry; they are seeking seriousness. Hard power is important, but equally vital is dependability, capability and the will to act rapidly. When these aspects are strong and clearly communicated, smaller and middle states can shape expectations and exercise meaningful agency and be a credible ally within a larger constellation of actors.
DISTANCE IS NO LONGER INSULATION: BUILDING RESILIENCE IS CRITICAL
Like Iceland, Canada is geographically distant from current kinetic conflicts. That distance once translated into comfort. It no longer does. In a system defined by rupture, rapid technological advancements and the reassertion of raw power, our geography is no longer a sanctuary. Threats can now arrive through cables, signals, markets, weather systems, information flows, and space-based assets – often together, and in addition to more traditional but no less lethal threats from hypersonic and other long-range missiles, which could arrive to North America less than thirty minutes.
The ability to prevent or absorb disruption, maintain continuity, and deny leverage to adversaries becomes as strategically important as traditional defence capabilities.
Canada has increasingly treated resilience – energy security, cyber defence, supply chains, secure communications, and northern logistics – not as domestic housekeeping, but as alliance capability. In a context where economic interdependence can be weaponized, these systems are no longer neutral; they are contested terrain. Societies that can absorb shocks and maintain operational continuity not only protect themselves, they also reduce the likelihood of becoming a weak link amongst their allies that can be leveraged by malicious actors.
This logic applies equally – and in some respects more acutely – to Iceland. Its geographic distance from conflict zones does not shield it from systemic risk; rather, its position in the North Atlantic places it at the intersection of strategic flows that are once again contested. Iceland has already taken important steps in this direction: strengthening cybersecurity frameworks, maintaining advanced air surveillance systems and investing in the resilience of critical infrastructure, including ports, communications, and energy systems. Its role in enabling allied operations through the GIUK gap reinforces that resilience at home translates directly into alliance value.
At the same time, the logic of rupture suggests that more will be required – by all parties. Continued investment in cyber and hybrid defence capabilities, protection of subsea cables and critical infrastructure, strengthened civil preparedness frameworks, control over data, energy, communications and supply chains mean that enhanced coordination with a wide range of partners will be essential. Planning for disruption – not as an exception but as a baseline condition – will increasingly define credibility. Iceland’s strong governance, high levels of social trust, and track record of managing natural disasters provide an exceptional foundation.
Canada and Iceland share the common challenge of how to enhance their defence and resilience capabilities in sparsely populated regions – and to do so in a way that responds to local community needs and interests.
The variable geometry approach also applies here – these areas of strengthened resilience benefit from cooperation among different groupings of countries based on interest and capabilities and can take on multiple shapes, such as shared research and development in Arctic security, developing partnerships around specific value chains to secure safe supply (i.e. critical minerals), joint procurement and financing for defence and resilience infrastructure and domain awareness information sharing.
Canada’s lesson is clear: relevance today is increasingly issue based. Allyship within a variable geometry approach allows smaller and middle powers to lead in niches rather than compete in scale. Credibility in alliance terms does not require universality. A jack of all trades, given limited resources and the scale of the challenge, is a master of none. Rather it requires selectivity, prudent management of finite national power, and the will to act. Iceland’s specialized expertise in areas such as maritime awareness, renewable energy resilience and crisis response makes it a valuable contributor into broader and collective efforts as it has the ability to deliver in critical times of need.
WORTHINESS IS A PRACTICE, NOT A CLAIM
Alliances do not collapse dramatically; they erode quietly when preparedness lags behind rhetoric. NATO’s credibility has suffered from this dynamic since the end of the Cold War, as most member states including Canada allowed military capabilities and defence industrial capacity to atrophy. Today, member states now need to take far more rapid and costly action to correct national capability and credibility gaps. Credibility must be demonstrated to adversaries and allies alike through capabilities, scaled and resilient defence industrial bases, robust budgets, clear strategic signalling, and political attention.
Prime Minister Carney’s Davos speech challenged countries to “name reality” and build strength at home so they can act with confidence abroad. For small and middle states, this is an opportunity. Our ability to think clearly, invest wisely, and cooperate selectively can remain indispensable. For all countries, this does mean that as a starting point, we need to see the world as it is, not as we wish it would be. This doesn’t mean we toss aspiration out the window but rather are clear-eyed about current realities and make deliberate, concrete steps to create and lead the change we want to see.
CONCLUSION: BEING A CREDIBLE ALLY
Being a credible ally today does not require uniformity or grand gestures. Nor can it rest on reputation, history, or statements of alignment alone. In an era of rupture, credibility must be built and rebuilt through realism, resilience, and readiness – paired with a willingness and ability to act, and to do so with others when it matters most.
Canada and Iceland are navigating some comparable challenges: how to remain indispensable without being dominant, how to manage a uniquely close but asymmetric relationship with the United States and how to convert finite resources into meaningful strategic effect. In this context, the answer lies not in scale but in selectivity – in identifying where one can contribute decisively, and doing so consistently.
What Canada’s experience suggests is that alliance relevance is no longer static; it is something that must be actively maintained across a shifting landscape of partnerships. Anchored in enduring relationships but able to operate across flexible configurations, countries like Canada and Iceland can still exercise real agency – if they are able to have strategic clarity about the environment they face and deliberate in how they respond.
If we do indeed take the world as it is, not as we wish it to be, being a worthy ally is not a status, it is a discipline. It requires sustained investment, difficult decisions, and the ability to deliver when called upon. For middle and small powers alike, the path forward is not about matching great powers, but about consistently and credibly proving that they can be counted on.