Well, that was an interesting weekend! Foolishly, this author did not stay up late last Friday night, believing what both the Canadian and U.S. trade negotiators had said, which was that we had an interim trade deal agreed to by both sides. Saturday morning was truly a revelation as I found out we had nothing of the kind and were being thrown into a serious trade war with our largest – by far – trading partner because Canada walked away from the table. What was supposed to be a relaxing Saturday turned into a serious work day, trying to find out what was going on and figuring out what the impacts on Canadian businesses and workers was going to be.
One of the key problems is that details are sparse. We believe that Prime Minister Mark Carney broke off the talks because of last-minute demands by the Americans. In his address following the cessation of trade talks, Carney cited three main reasons. One was that the U.S. said they were going to exclude the trucks that Canada manufactures from tariff relief. A second was that some U.S. demands were threats to Canadian culture and sovereignty. The third was that the U.S. supposedly wanted to curtail Canada’s ability to sign trade agreements with other countries.
To buy all of this, one would have to believe that Carney was telling the truth. It is prudent for all Canadians to ask for proof that what he is saying is true. For their part, U.S. representatives are claiming that Canada demanded some last-minute concessions they were not willing to surrender. So, we seem to be in a he-said, he-said kind of situation. What should happen is for both countries to publicly release the deal that was on the table that both sides said they were in agreement with just a couple of days earlier, and the actual conditions that broke the deal. Sadly, we shouldn’t hold our breath for that to happen, even though citizens on both sides of the border deserve the truth.
The breakdown of negotiations is very bad news for Canada’s small- and medium-sized businesses (SMEs), their employees and Canadians generally. There is no doubt that negotiating a comprehensive trade deal with the U.S. is a challenge, yet Carney assured us during last year’s federal election that he was the right man for the job. The failure of negotiations suggests that was clearly not the case. Carney was well aware of the obvious challenges going into these negotiations last year yet still claimed he would reach a good deal for Canada. This failure means serious damage for the Canadian economy. The lack of certainty about our trade relationship with the U.S. for the past year and a half has already led to business failure, businesses relocating to the U.S. and job loss in Canada. This negotiation breakdown can only worsen these impacts.
Some Canadians seem to believe that Carney’s efforts to diversify Canada’s trade will be successful in cushioning the blow of this conflict with the U.S. Yet few Canadians seem to realize that for decades, both Liberal and Conservative federal governments have worked to diversify Canada’s trading relationships with little success. Although trade diversification will always be a positive goal, economic realities mean that the U.S. will remain our largest trading partner by far for a very long time to come. Another element of Carney’s speech following the break in negotiations was claims about Canada’s economy that painted a rosy picture of future Canadian economic prospects. These claims defy belief given current factual statistics. Our dollar is already taking a hit on world markets, which will hurt all Canadians.
Another worrisome aspect of the breakdown of trade talks is that Carney promised to dig Canadians into even more debt by saying he will be bailing out affected industries and their employees with billions more borrowed money. Looking over Carney’s term as prime minister to date, he seems to believe the answer to every economic challenge is more government spending. History has repeatedly shown the foolishness of this approach as it boosts inflation, degrades our currency and crowds out the productive private sector. Canada’s burgeoning debt is approaching unsustainable levels. Canada is currently flirting with a repeat of the mid-1990s, when Canada was effectively bankrupt. That’s the last thing we need.
The Conservative Opposition is asking for an emergency return of Parliament, which was not scheduled to return until Sept. 21 before this fiasco erupted. This is an excellent idea, as all political parties and the many Canadians that voted for them deserve to be represented on this incredibly important issue. Carney has demonstrated on a number of occasions that he doesn’t have a whole lot of respect for Parliament, rarely showing up for Question Period and making key decisions unilaterally when Parliament is not sitting. This is no way to conduct business in our democracy. Parliament should indeed be called back immediately to get further information on what is actually going on and provide input into the trade negotiations.
At present, the lack of information is a key problem. The Carney government appears reluctant to share the facts with Canadians, as they have on so many other occasions. Who knows if we may end up getting more information from U.S. sources, as we did on the Gordie Howe bridge situation? We could feasibly see new negotiations next week, or this impasse could go on for a very long time. Although both countries will surely suffer from the imposition of 50 per cent tariffs on many key products, Canada will always suffer more as we are the smaller player in this trading arrangement which depends much more on the U.S. than they depend on us. The Canadian economy is already weak because of 11 years of bad Liberal government policy that has hobbled our vital energy sector, damaged small- and medium-sized businesses and hurt average Canadians. Let’s hope this serious deadlock is resolved as soon as humanly 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.
