Canada’s already afraid of big, bad America

TORONTO—The white flags are already being unfurled. These are the surrenders-in-advance by Canadians to a feared attack by the incoming Trump administration to either weaken or eliminate Canadian policies they don’t like, or cancel the Canada-U.S.-Mexico Agreement. Indeed, the white flags were unfurled even before the American election because of worries that no matter who won—Kamala Harris or Donald Trump—the United States planned to coerce Canada into reversing certain policies it opposes or, failing that, finding harsh ways to punish our nation. It would use the planned 2026 review of CUSMA to win the concessions it failed to get at the time CUSMA was negotiated. With Trump, there’s now the threat of 10-20 per cent tariffs on our exports to the U.S., which will see much Canadian pleading for an exception in return for cancelling targeted policies. Too many Canadians fear the U.S., no matter who is in charge. Canada, of course, should not seek to put a thumb in the American eye. But we should identify our core interests, and make clear that we will behave as a sovereign state, not a vassal. This even means not clinging to CUSMA at any price. But more importantly, we should see the Trump election as a cold shower, forcing us to focus more clearly on upgrading our own economy based on Canadian firms with propriety technologies, and scale and scope for global success. This is our most urgent need. We can deal with the U.S., and adjust to its pressures. But we have to get our own house in better order, which is up to us. The most recent OECD report on growth and economic well-being found that while the G7 countries as a group have—from second quarter 2022 through second quarter 2024—averaged real per capita growth in household income and in per capita GDP, Canada has shown an overall decline in that period. Success in improving our economic potential—and with it the capacity to deliver high-quality public services—is what will really determine our future as a prosperous and sovereign nation. Improving our economic performance is the real challenge. A big argument in the early 1980s for Canada-U.S. free trade deal was that a deal would bring mutually binding rules that would protect us against unilateral American coercion. It hasn’t worked out that way. Despite the free trade agreement, and its successors—NAFTA and CUSMA—we are more fearful of the America today than we were in the early 1980s. Moreover, we are now hostage to CUSMA, and, at the end of the day, we will do almost anything to avoid cancellation. And the Americans know that. The most recent example of surrender in advance is a National Post column by Kevin Lynch, former clerk of the Privy Council, and Paul Deegan, former senior executive at Bank of Montreal. In it, they argue “we need to address U.S. irritants such as the digital services tax and supply management in dairy,” and be ready to compromise on both, adding as well that Canada should adopt U.S. foreign trade policy “with both countries implementing common tariffs for countries, such as China, that pose security and tech dominance risks.” U.S.-China policy would become Canada’s China policy. Noting that Trump will pull back on climate change, and that “our climate change policies need to reflect the reality of a changed North American energy landscape as well as the diminished role of the UN’s COP process in setting climate-change roles.” This suggests a weakening of our domestic climate policies. At the same time, Deegan and Lynch argue, “we have to accelerate the timetable for getting our defence spending to two per cent of GDP—maybe more—and we need to do it fast.” They are not alone. For some time the Business Council of Canada—representing Big Business—has been sending a succession of letters to cabinet ministers urging them not to proceed with the digital services tax because of U.S. opposition—it was passed as part of 2024 budget—and, more generally, not to irritate the U.S. The Canadian Chamber of Commerce has also voiced alarm about upsetting the Americans. So where are the leaders in both political and business life who are strong supporters of Canadian institutions and policies, and see the need for a different kind of leadership that’s focused on our own future? Instead, many of our business groups and think tanks are ready to sacrifice our supply management system because the Americans don’t like it. (They didn’t like the Canadian Wheat Board, either, so we abolished it, and much of the export sale of our grains is now handled by international corporations). The supply management system—dating back to the 1970s and covering dairy, poultry and eggs—works well, bringing stability to production and prices with no taxpayer support. Comparing American retail prices leaves out the contribution of U.S. taxpayer subsidies to dairy. In 2010, the U.S. exported US$446.4-million of dairy products to Canada; in 2023, that had grown to US$756.2-million so they have growing market access. But what the U.S. wants is that our country becomes the dumping ground for excess its production. Our system, however, is a critical part of our own need for food security. This should be a Canadian red line. Similarly the digital services tax is a legitimate measure to force big-tech companies like Alphabet/Google, Meta (Facebook), Amazon and others to pay taxes in here. France, Italy, Spain and Britain already have such taxes, and Canada only acted after several missed OECD deadlines to implement such a levy. Over time it should raise about $1-billion a year. Americans oppose our new tax. Likewise, Americans are unhappy with another Canadian policy forcing streamers like Netflix, Prime, and Disney to allocate a small fraction of their major earnings in Canada to produce Canadian drama and other content, much as our own TV networks have been required to do for many years. The bottom line is that Americans care about their country, and push hard for its commercial, cultural, and other interests. It’s time for Canadians to feel as strongly about our own country’s interests and its future. The best consequence from a new Trump administration is that Canadians will take this as a wakeup call—or cold shower—to take greater charge of their own future. David Crane can be reached at crane@interlog.com. The Hill Times

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Canada’s already afraid of big, bad America

The best outcome of a new Trump administration is that Canadians will wake up to take greater charge of their own future.

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