Post Tariffs: Building a Canada Fit for Purpose

To say that the brash remarks by President Trump over the last five weeks have shocked Canadians would be an understatement. While most observers expected that a victory for President Trump would not be a positive event for Canada, his rhetoric has incensed even the most patient of us as outlandish, ridiculous, and sometimes cruel.

What began as a criticism of border and trade policy has morphed into a shocking attack by our closest neighbour, ally, and friend. As the President's rhetoric continues to grow, many Canadians find themselves questioning America's position in the world and our future in relation to them.

Historically, we have viewed ourselves as a close but distinct people from the United States, and for many of us, the rhetoric by President Trump cuts deep. America is the home for members of our families and those who we call friends. It is often where many of us vacation when we say, 'We will travel abroad,' and it is sometimes the home of the sports teams we cheer for.

For our business community, entrepreneurs, and innovators, the United States has been their first step into the world. It is where we have sought collaboration and investment. It is where partnerships flourished, and cross-border trade uplifted those on both sides of the 49^th parallel. From the auto sector in Southwestern Ontario to the potash mines in central Saskatchewan, Canadians and Americans have worked tirelessly, hand-in-hand, for generations.

But all of that was called into question on February 1, 2025, which will forever be known as more than just 'a day' to Canadians. In fact, I believe it will be remembered as more than just 'a day' in the history of the West.

With the threat (and the most likely imposition) of tariffs, February 1, 2025, marked the end of the post-Second World War consensus on international trade and expected norms under American leadership. The uncertainty President Trump unleashed and the cracks in the facade that was America's prestige he willingly laid bare cut deeper than nearly any recent comment or remark made by a President of the United States towards America's allies and partners.

Nearly five generations of work to promote cooperation and collaboration to address global challenges has been irreversibly tarnished, as no rational leader can squarely assure their people that ‘We can trust the United States government.’ In unison, Canadians realized that the United States was not the partner we believed them to be. The rhetoric, the choice of language, and the action taken by the United States government hurt. A reputation takes years to build and moments to destroy.

To resolve the predicament we are in, it is time we acknowledge the gravity of our situation. For the last 80 years, Canada has relied on and trusted the United States for our security and economic development, often blindly. With America returning to its pre-Second World War policy of isolationism and mercantilism, it is critical we build a country that is fit for purpose for our new reality.

For too long, Canadian economic development has been mired in bureaucratic quagmires, inter-provincial fighting, and corporate fatalism that produced an overdependence on the United States. Relying on trade with America set into motion a never-ending cycle of building north-south connections, not east-west. 80+ years of developing these connections have stymied Canadian growth globally, resulting in a Canada which is nearly wholly dependent on the US.

To that end, for Canada to succeed in the 21^st and 22^nd centuries, we must move beyond the United States and engage with the global community as a serious and competent member. I recognize this will not be an easy task, but transformation and evolution are critical for the success of coming generations.

Through collaboration with the international community, we have the tools to help us pivot from the United States. Under the Harper Government, led by former Minister of International Trade, Mr. Ed Fast (the best trade minister in our country's history), Canada signed a record number of free trade agreements. These deals were part of a long-term vision for Canada that ensured Canadian businesses and consumers would have unparalleled and reciprocal market access worldwide. Through their leadership, Mr. Fast and the Harper Government recognized the importance of being an active member of the global community.

To further improve our current situation, here are some programs the government can enhance today that exist already. These measures include:

Trade Commissioner Service: Over the years, we are fortunate to have developed a well-established cadre of trade commissioners (both federally and provincially) on whom we can lean on and support. Independent of the federal government, the provinces have developed an extensive web of trade representatives across the globe who have developed specialized knowledge in unique domains. As the federal government, we should encourage this specialization and support collaboration between the provinces to ensure effective business development globally. I would also like to mention that the federal trade commissioner service should be reprioritized to countries that are necessary for our future economic prosperity, away from countries where trade is negligible or not part of Canada’s long-term plans. As well, the service must instill a culture of thinking in which our commissioners are aggressive in securing market access for Canadian businesses across the globe.

Export Development Canada (EDC): The new age we are entering also requires an evolution of EDC if we are to support economic development and bring our goods and services to market – beyond the United States. The world has changed significantly, and as a result, the federal government must give EDC a new mandate and the tools required to operate aggressively in this new environment. For example, the federal government can provide rate buydowns for first-time exporters, thereby giving them cheap insurance and financing options as they experience new markets outside of the United States. International expertise at EDC is also vital when promoting Canadian enterprises abroad in partnership with the Trade Commissioner Service. EDC and the Trade Commissioner Service will also have new, innovative ideas to help Canadian SMEs succeed in this uncertain environment, and we should embrace those ideas.

Business Development Bank (BDC): Domestically, among other challenges, Canada is constrained due to low productivity levels and restrictions on accessing non-American capital for startups. BDC is in a unique opportunity where it can provide, in partnership with Canadian financial institutions, reduced lending rates for established Canadian businesses to grow domestically. As part of this initiative, we must also develop a new funding model for startups that provide capital at a low cost for new companies, thereby de-risking our emerging technologies from American VC funding. These programs will be of particular importance to sectors that are within the national interest, such as defence, aerospace, and technology (to name a few).

Immigration: With the Department of Government Efficiency (DOGE) in full swing in the United States, many researchers in critical sectors are losing funding and thereby at risk of losing their status in the United States. Canada should capitalize on this mistake by the Americans. Offering an expedited visa approval process for researchers and their families should be prioritized in critical sectors. This is an opportunity for Canada to secure and support some of the brightest minds who have been caught up in the slash-and-burn chaos that is DOGE.

Also, creative, outside-the-box thinking is needed to expand Canadian businesses into foreign markets. For example, the work being done by the government of Newfoundland and Labrador in providing $6 million to help the province's fishing industry explore diversified markets is a positive step forward. This needs to be done by all levels of government and across various sectors. Also, engaging with Canada's diaspora community more fully to support economic partnerships abroad should be a priority for the government.

Internationally, Canada will exist in a more dangerous and divided world, and engagement will not be limited to economic partnerships; security and defence will play a crucial role in shaping our trading relationships. To that end, Canada must meet our NATO obligations for military spending and actively support democracies worldwide. As the global community fractures into a multipolar world, Canada must take its national and economic security seriously. To that end, Canada must have the ability to exist as an independent entity and provide security to its own citizens, independent of the United States.

We must build a country that is fit for the purpose of the times in which we live. No matter how much we wish for a return to the post-Cold War era of the 1990s, it will not come back. The longer we take to recognize this new reality, the worse off we will be.

To be treated as a serious country, you must act like a serious country. Canada has the resources, the people, and the skills that make positive change possible for future generations.

Will it be challenging, most definitely. But it is not impossible. For Canada to succeed in the 21^st and 22^nd centuries, we must get our house in order, and we must build a country that is fit for purpose.