Prime Minister Mark Carney’s video to Canadians that was aired this past weekend is creating a great deal of concern among Canadian businesses. During the almost 10-minute-long remarks, in Carney’s ongoing theme of Canada moving away from the U.S. in trading relations, he seems to have implied a much greater plan than he has in the past to divorce Canada from its largest trading partner. This promises to be an enormous mistake, motivated by political instincts to benefit Liberals at the expense of the welfare of the Canadian economy and the standard of living of average Canadians. In fact, in the eyes of businesses, this could well be a gigantic gamble with Canada’s economic future. It is also something Canadians never voted for.
In fact, Carney was initially voted in with a minority government presenting himself as the best person to negotiate a beneficial trade agreement for Canada with the US. Having failed to do so after over a year as prime minister, Carney now appears to favour achieving no trade deal with the U.S. for purely partisan reasons. This is not what Canadians supported in the election. Quite the opposite, in fact.
The USMCA/CUSMA trade deal has been enormously beneficial to Canada for the roughly 35 years it and its previous incarnations have been in place. As Carney himself has said in the past, 85 per cent our large amount of trade with the U.S. is tariff free, a deal that other countries would die for. To suggest we can just permit the deal to lapse without a devastating and long-term impact on Canada is dishonest and naïve. No decision of this magnitude should ever be based on the statements of any particular U.S. president whose term in office will be relatively short-lived.
Of course, Carney did not say exactly that he would permit the deal to lapse, but every statement he makes on the topic is geared to convince Canadians we need to move further and further away from the U.S. It’s also well-known that Canadian politicians and bureaucrats on the team to supposedly negotiate a resumed trade deal with their U.S. counterparts have not exactly been keen to do so.
The U.S. Ambassador to Canada, Pete Hoekstra, has said on several occasions that the two sides were close to agreement on several important elements of the trade deal, such as steel, aluminum and lumber, last autumn. Then Ontario Premier Doug Ford decided to weigh in with the ill-advised “Ronald Reagan” ad which scuppered the negotiations. According to Hoekstra, no actual negotiating has taken place since then.
Canada is already suffering the loss of jobs and businesses because of uncertainty surrounding the future of Canada-U.S. trade. Carney’s recent speech worsened this uncertainty. Many past Liberal governments have attempted to move away from the U.S. in terms of trade, and all prior attempts failed miserably. This one will too as geography, common language and similar cultures, and highly integrated supply chains and business relationships will always prevail over one Canadian government’s political wishes to alter something that has worked well on balance for centuries.
For someone who frequently criticizes the U.S. and its administration, Carney has an odd fondness for U.S. practices. For instance, his video bore many similarities to a U.S. president’s State of the Union address, something in which Canadian prime ministers rarely indulge. In the past, Carney has used photo-ops including “executive orders” to make policy announcements. Such things are a U.S. government tool and meaningless in Canada. He also used American social media, not Canadian media, to carry his address. Strange choices for someone trying to fashion himself as Captain Canada.
As far as the substance of Carney’s video went, he said nothing new other than to ramp up the anti-U.S. rhetoric and imply that Canada does not need a trade deal with the U.S. He mostly just reiterated what he has said many times before about building Canada strong, being more reliant on ourselves, and expressed quite a bit of protectionist talk that any competent economist should be ashamed of promoting. Many of his remarks were nonsensical to anyone that understands the Canadian economy.
For instance, Canada currently exports 85 to 90 per cent of our auto production to the U.S. Does Carney think Canadians are now going to buy eight or nine cars each so we can replace these exports? Of course that is ridiculous. Or does he think we’ll be sending them to China, a country that makes autos much more cheaply than we do as they pay their workers much less, have inferior safety regulations, environmental laws, none of Canada’s foolish “climate” taxes and a government that subsidizes its industries to knock out foreign competition? Equally absurd.
Or will other markets, which will require more transport costs to access and other regulatory, language and other barriers, be expected to replace the U.S.? You don’t have to be a rock star economist to know none of this makes any sense. In over a year, there is no doubt that Carney is a much better talker than he is a doer, as none of his many big announcements have actually been implemented nor had any real, positive impact on Canada.
Many Canadian firms are establishing business premises in the U.S. or seriously considering it. This was going on well before Trump’s second term and was a result of an uncompetitive business climate in Canada. Talented young people are also leaving Canada for greener pastures south of the border. This exodus needs to end. Businesses and individuals that leave rarely return. Federal and provincial governments should be looking at their own destructive policies that have caused our economy to decline in the past decade instead of fighting with our largest trading partner, however politically entertaining that might be.
This is also a pivotal time in Ottawa’s relationships with the provinces, with separatist sentiments growing. A devastating blow to provincial economic fortunes such as not renewing the Canada-U.S. trade deal will worsen these tensions and provide a boost to the separatists. Putting short-term partisan politics ahead of the long-term well-being of Canadians is irresponsible and a betrayal of all Canadians. It must end as soon as possible.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
