Canadian Prime Minister Mark Carney hit back on Thursday at US President Donald Trump's inflammatory claim at the World Economic Forum that "Canada lives because of the United States."

"Canada doesn't live because of the United States. Canada thrives because we are Canadian," Carney responded in a national address in Quebec City ahead of a new legislative session, even as he acknowledged the "remarkable partnership" between the two nations.

Carney's comments on Thursday followed his speech at the forum of political and financial elites in Davos, Switzerland, where he won a standing ovation for his frank assessment of a "rupture" in the US-led, rules-based global order.

That speech on Tuesday, which made world headlines, was widely viewed as a reference to Trump's disruptive influence on international affairs, although he was not mentioned by name.

Carney told Davos that middle powers like Canada who had prospered through the era of an "American hegemon" needed to realise that a new reality had set in, and that "compliance" would not shelter them from major power aggression.

Trump took umbrage, and taunted Carney during his own speech a day later.

"I watched your prime minister yesterday. He wasn't so grateful," the US president said on Wednesday.

"Canada lives because of the United States. Remember that, Mark, the next time you make your statements."

In Carney's speech on Thursday, aimed at a domestic audience, he said that Canada should serve as a model in an era of "democratic decline."

"Canada can't solve all the world's problems, but we can show that another way is possible, that the arc of history isn't destined to be warped towards authoritarianism and exclusion," the prime minister said.

While Carney has not been shy of criticising Trump since he took office nine months ago, he heads a country that remains heavily reliant on trade with the United States, the destination for more than three quarters of Canadian exports.

Key Canadian sectors like auto, aluminium and steel have been hit hard by Trump's global sectoral tariffs but the impacts of the levies have been muted by the president's broad adherence to an existing North American free trade agreement.

Negotiations on revising that deal are set for the start of this year and Trump has repeatedly insisted the United States doesn't need access to any Canadian products – which would have sweeping consequences for its northern neighbour.

Trump has also repeatedly threatened to annex Canada, and this week posted an image on social media of a map with Canada – as well as Greenland and Venezuela - covered by the American flag.

On Thursday, Carney said Canada was not under any "illusions" about the precarious state of global relations.

"The world is more divided. Former alliances are being redefined and, in some cases, broken."

Citing his government's plans to ramp up defence spending, Carney said "we must defend our sovereignty (and) secure our borders."

Canada, he further said, has a mandate "to be a beacon, an example to a world that's at sea." (AFP)