Canada needs to turn economic protest into an economic pact

On Tuesday, President Trump announced a long-awaited trade deal between Canada and the United States and put a three-day-pause on his incoming volley of 50 percent tariffs to iron out the details. Prime Minister Carney quickly convened both his cabinet and Canada’s premiers on Wednesday afternoon to brief them on terms. Details continue to trickle out while negotiations continue. The big question: Have we bought peace in our time? If so, for how long and at what cost? There’s no question a reprieve is welcome. Canada’s economy is in a far more precarious position than many of our peers. Sadly, we’ve done this to ourselves; partly through intentional decisions, partly through policy choices that seemed well-intended, but were ultimately self-defeating. We’ve built an economy that is highly dependent on U.S. integration while fundamentally uncompetitive, both with the U.S. and with markets around the world. The fact we rely on a deeply discounted Canadian dollar as our prime competitive advantage underscores that point. For the past four decades, Canada has had free trade with the U.S., and with it, we’ve built a unique relationship unlike any in the world. Our integrated market has served both countries well, with enormous mutual reliance on both sides. Here’s the problem: what was once our calling card—deep integration—is now our Achilles’ heel. President Trump has violated the relationship. Twice. In 2017, he threw out NAFTA. We renegotiated to get CUSMA. Now we’re renegotiating again. Canada has highly skilled negotiators doing excellent work, but putting all of our eggs in the U.S. basket in the 1980s has backed us into a corner today. Each time we renegotiate, the outcome is not as good as the previous agreement. View reader comments (0) One thing we know for certain: as long as President Trump is in the White House, certainty is in short supply. While it looks like we are going to escape this precarious situation with some battle damage, the next question for Canadians is: what are we going to do with the reprieve we’ve bought? Are we going to patch the damage and hope for the best, or use this time to finally fix what’s broken? While details are still scarce, there was never going to be a way to avoid some big concession if we were going to sidestep these punitive 50 percent tariffs on $28 billion of Canadian products. It’s time to wake up to the reality that the future of trade for Canada is not going to be solely with the U.S. We need to be more self-reliant. We need to diversify our markets. We need alternatives. Graphic credit: Janice Nelson But to do that, we need to get our own house in order. That starts with national unity. In the face of U.S. aggression on the one hand and a more globally competitive economic environment on the other, we need to finally behave like one country. In the latest round of tariffs, the U.S. astutely sought to pit Canada’s energy and resource provinces against our manufacturing provinces. Coordinated provincial action strengthens our negotiating hand. It doesn’t weaken it. Canadians showed what unity looks like—buying Canadian, travelling in Canada and supporting our local industries. We’ve started to see the power of our 41-million-person, $3 trillion economy. Now we need to turn our economic protest into a powerful economic pact. We’ve demonstrated a laudable willingness to work together in the national interest—informally. We need to take the next step: formalize and institutionalize our economic union. Graphic credit: Janice Nelson The second part of national unity means addressing our high-cost interprovincial trade barriers once and for all. Groups, including Toronto Region Board of Trade, have called on Canada’s premiers to address this issue for years. But what has become clear is that to get a different outcome, we need a giant pivot. In July, we called on Canada’s provincial and territorial leaders to go beyond incrementalism. That’s comfortable, but never gets the job done. They should request in their own interest that the federal government establish a clear national vision for a single Canadian market, bring all parties together around a time-bound implementation plan, and act as the guarantor to ensure the work gets done. The name of the game will be harmonizing standards across the country in key sectors. Next month, the prime minister will host global financial leaders. The goal: to attract $1 trillion into key sectors of the Canadian economy. If we have any ambition for our economy and want to grow it for future generations, it’s clear we’re going to have to be both more self-reliant and seek to diversify our markets. The financial summit is a golden opportunity to demonstrate what an outward-looking Canada can look like. We may have peace in our time today, but it’s anyone’s guess how long it will last. What’s clear is we can’t let this be the end of the story. It has to be the start of something new. Giles Gherson discusses the proposed trade deal between Canada and the U.S. announced by President Trump, emphasizing the need for Canada to reassess its economic strategies. He highlights Canada’s dependency on U.S. trade and the importance of diversifying markets and fostering national unity. Canada must not only address immediate trade challenges but also work towards a more self-reliant and coordinated economic approach. The upcoming financial summit presents an opportunity for Canada to attract investment and redefine its economic future, moving beyond mere survival to proactive growth. Ask about this article — or anything in Canadian politics, economics, and public policy — powered by The Hub’s 5,000-article archive and deep area expertise. Comments (0)