Key topics:
- Canada must prepare for any US trade actions, including retaliation.
- Economic independence and market diversification are critical.
- A strong military and national security strategy are essential.
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By Stephen Harper*
I am frequently asked what to make of President Trump’s intentions towards Canada and what we are to do about them. On the former, I do not know, and I suspect there is no way of really knowing. On the latter, however, Canada must have a plan.
The facts are clear: President Trump was prepared, on a pretence, to jettison the almost entirely tariff-free trade that has defined the Canadian-American economic relationship for three and a half decades. He appeared prepared to even discard the trade agreement that he signed in his first term. Then, equally on a pretence, he cancelled that plan for 30 days. We do not know what the plan is after that, or if there is one.
I suggest that there are four clear lessons for Canada.
First, we must be calm in the face of Mr. Trump’s threats. We must wait until it becomes crystal-clear what the President will do before acting ourselves.
We should also remember that there is no significant body of public opinion in the United States calling for comprehensive trade action against Canada. Such action would hurt many Americans.
Second, we should have contingencies for any possible scenario, including the worst. These must be prepared well in advance. There should be no debate, for example, over whether we would retaliate in the face of tariffs. It is true that retaliation is a poor choice, but, in the event of a trade war, we are left with only bad choices. Thus, our measures need to be carefully calibrated, with clear objectives in mind. But the worst possible response is no response at all, as that would lead to one-way economic flows from Canada to the United States.
Third, we should not offer unilateral concessions. Concessions will simply be pocketed, and the demands will be ratcheted up. Make a concession only when we know what we are getting in return.
That is the simple stuff. There is, however, a fourth, more troubling lesson, to take from all of this. It is the general perspective that the President has repeatedly articulated about our country. It is one that goes well beyond his understandable hostility to our current government.
Rather than seeing the U.S. relationship with Canada as its most profitable, most reciprocal, and most secure in the world, the President views it as a drain on America. He believes that Canada’s economic activity could take place in the United States and should move there. And he believes that Canadian sovereignty is undesirable.
I certainly do not share that view of our relationship. I have repeatedly said that Canada’s alliance, partnership, and friendship with the United States is one of our country’s greatest assets. However, given a contrary American perspective, our focus now should not be on pursuing a deeper economic and security partnership. At this stage, whatever comes next from the President, Canada must avoid further dependency on the United States.
I say this because the preservation of Canada’s existence must be our highest objective. I do not assume that such a belief is universal, particularly if the cost is high. But it should be, and we need leaders who share that belief, who oppose the woke denigration of Canada, and who are prepared to see this fight through to victory. Our distinct history, identity, and cultures are worth preserving.
The current situation thus presents great risk, but also considerable opportunity. We can use this moment to make Canada a proud and serious country once again. This is a chance for us to develop a long-term agenda to become an internationally competitive economy. That would mean big changes, not just in government policy, but also in our economic structures and business culture.
We must break down interprovincial trade barriers, open internal markets, lower taxes, reduce subsidies, thin regulation, get our resources out of the ground, build export-oriented infrastructure, and make it a national mission to diversify our external markets. My government created a global network of free-trade agreements. It is well past time for Canada to take advantage of the possibilities that were created over a decade ago.
If we choose this path, we will become stronger. But if we respond to this turmoil with a Canadian version of Trumpian protectionism, our country will weaken. Beyond the necessary retaliatory measures, enhanced protections and subsidies for Canadian business, even temporarily, only increase damage. Such policies would mean the adjustment to new economic realities would be delayed. Our balance sheets would be weakened further at the moment when we most need them to be stronger.
Even worse would be continuing down the path of Davos elitism. Our competitiveness agenda must be focused on opportunities and incomes for working Canadian families, not just the economic one per cent. The elitist priorities of Canada’s current leaders in monetary policy, deficits, immigration, climate, and many other areas have already fuelled inflation, doubled housing costs, and created the worst growth in the G7.
Avoiding economic elitism is especially important when it comes to the re-engineering of our energy economy. Like it or not, alternatives to fossil fuels — nuclear power excepted — are not economical, reliable, or viable at scale. There is no guarantee they will become so. That is why they have been massively subsidized for the last decade.
In contrast, fossil fuels will remain immensely profitable business for the foreseeable future. It is economic malpractice to ignore this fact. Canada’s best route to quickly turning around the downward trajectory of our economy is the responsible development of our energy resources. This was true in the recession of the 1980s and during the global financial crisis, and it remains equally true today.
We must also be what every sovereign nation should be: responsible for the protection of our citizens from crime and the maintenance of our own national security. Yes, our border is a shared responsibility with the United States. But beyond those lines, we must reinvigorate our military and invest in the full range of capabilities necessary for the defence of Canada’s land, seas, and sky. We should aspire to depend on no one for this work. We should remain a partner of the United States, yes, but also be capable of independent action.
These are dark days, but they will pass. Let us see this challenge as an opportunity for Canada to embark on a voyage of urgent national renewal.
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*Stephen Joseph Harper (born April 30, 1959) is a Canadian politician who served as the 22nd prime minister of Canada from 2006 to 2015. He is, to date, the only prime minister to have come from the modern-day Conservative Party of Canada, serving as the party’s first leader from 2004 to 2015
