This paper examines the evolution of Canadian foreign policy in the context of shifting conceptions of sovereignty in the 21st century. As a middle power，a leading trading nation，and codependent on its bilateral relationship with the United States，Canada could never manage a truly independent foreign policy. Instead，it engaged in functional specialization，crafting a role and an identity for itself as a peacekeeper，honest broker，and good global citizen. This profile is changing，however，less as a result of the global recession，which Canada has weathered better than most advanced economies，than the economic and ideological predilections of the current Conservative administration. The author suggests that Canada’s traditional external relations focus as a model and mentor of good governance and sustainability is devolving into a wholesale neo-liberal petrostate. Lessons and implications for China include Canada’s experience leveraging limited sovereignty in an increasingly globalized world and how to maintain China’s own functional specialization as it transitions to great power status. Attention is also given to China’s unique model of sovereignty and responsibility.