Donald Trump is the U.S. president once more, but Canada remains strong and free.
While the tariff threat still looms, it feels like Canada is slightly stronger than we were a few months ago.
In a bizarre way, we have Trump to thank for that.
The reality-TV star turned politician sees the world like a conflict drama: Allies are adversaries, and negotiation is a game of winners and losers.
In Canada, he saw weakness: a sluggish economy. Falling productivity. The rapid-fire resignations of both the finance minister and the prime minister. As an incredulous CNN anchor said to Ontario Premier Doug Ford, 鈥渢he entire government has gone into chaos.鈥
In November, Trump put the loaded gun of tariffs on the table, rooted in the falsehood that the U.S. trade deficit with Canada聽鈥 driven by American consumption of Canadian oil聽鈥 was a 鈥渟ubsidy.鈥 In January, he pressed his advantage, threatening to use 鈥渆conomic force鈥 to make Canada the 51st state.
Was he serious? Probably not. More likely, he said it to keep Canada off balance. In doing so, he united Canada in a way Justin Trudeau hasn’t in many years.
It was Ford who captured the national mood聽鈥 without saying a word聽鈥 when he emulated Trump鈥檚 tactic of putting a message on a baseball cap: 鈥淐ANADA IS NOT FOR SALE.鈥 Within a day, the Ottawa-based small business that made the cap sold 50,000.
The Ontario premier understands the best strategy to make peace with an aggressive opponent: Show strength聽鈥 and a willingness to use it. Reduce your vulnerabilities. And offer a better alternative.聽
Show strength
Yes, a trade war would hurt Canada badly. But the best path to averting or at least mitigating it is to show that it would cause economic devastation on both sides of the border. A trade war has no winners.
Canada鈥檚 strength comes from its many assets聽鈥 the things American businesses and consumers need. We represent 56 per cent of its imported oil, almost half of its nickel and potash, and more than a quarter of their uranium and germanium.聽Ontario alone provides electricity to almost 1.3 million homes in New York, Michigan and Minnesota.
Reduce your vulnerabilities
If it鈥檚 going to get rough, Canada has to get buff.
In the last decade, Canada has done little to arrest its declining productivity. Faced with an existential threat, we must replace complacency with competitiveness.
For example, the Ontario Chamber of Commerce has called on provincial and federal leaders to dismantle interprovincial trade barriers (which alone could neutralize the economic impact of any Trump tariffs); lower the cost of doing business; accelerate the development of strategic industries such as mining; invest in infrastructure, post-secondary education and community health; and help businesses diversify their trade relationships.
Just as governments acted decisively to protect businesses, workers and communities during the COVID-19 pandemic, the same level of focus is required today聽鈥 this time less through broad-based spending, and more through targeted investment, policy and regulatory reform.
Finally, our political leaders聽鈥 federal and provincial聽鈥 must stand together. Those who seek to use the Trump threat to benefit their party, or to prioritize local interests over the national interest, must be made to pay a heavy price.
Offer a better alternative
Unwittingly, Trump himself pointed toward the better path.聽鈥淐anada and the United States: that would really be something,鈥 he said. This is what we already have: an economic partnership that delivers massive聽鈥 and equal聽鈥 benefit to both countries.
While the president鈥檚 comments about annexing Canada were disrespectful and disappointing, they were also distracting to both Americans and Canadians, overshadowing聽a much greater risk and opportunity.
In the next four years, America鈥檚 single greatest geopolitical imperative is to strengthen its hand relative to China, and Canada is an essential partner in achieving that goal. Doing business with us is a far smarter alternative.
The case for optimism
The silver lining in all this comes from both Canada鈥檚 new-found unity and Trump鈥檚 new-found reality.
Now that Trump has been sworn in, his words no longer come unburdened with consequences.
He now has many interests to satisfy, and many partners essential to anything he wants to do: cabinet members, congressional leaders, governors, senior staff and business leaders. Most of them acutely understand what鈥檚 at stake, and see little benefit to a trade war with Canada.
Canada is stronger than we were in November because we鈥檙e more united. But unity alone isn鈥檛 enough. It鈥檚 time to show strength; to reduce our vulnerabilities; and to offer our American partners a better alternative. This may involve short-term sacrifice, but the long-term returns can be handsome, with 2025 being The Year of Living Courageously.
Canada has assets the world needs, and the talent to turn these assets into an enduring competitive advantage.
Today鈥檚 currents of political and economic change are a wake-up call to government聽鈥 and a call to action for business.
Together, we must answer it.
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