{"id":16042,"date":"2025-02-06T05:11:41","date_gmt":"2025-02-06T05:11:41","guid":{"rendered":"https:\/\/financialrush.com\/?p=16042"},"modified":"2025-02-06T05:11:41","modified_gmt":"2025-02-06T05:11:41","slug":"justin-trudeau-summons-business-leaders-to-break-canadas-economic-dependence-on-us","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=16042","title":{"rendered":"Justin Trudeau summons\u2009business leaders to break Canada\u2019s economic dependence on US"},"content":{"rendered":"

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After spending months talking up Canada\u2019s relationship with the US, Prime Minister Justin Trudeau will convene an economic summit on Friday with a new focus: promoting his country\u2019s trade with the rest of the world. <\/p>\n

The goal of the Canada-US Economic Summit will be to \u201cmake it easier to build and trade within our borders, and diversify export markets\u201d, Trudeau said on Wednesday. <\/p>\n

The move comes days after Trudeau negotiated a 30-day reprieve from Donald Trump\u2019s plan to impose tariffs<\/a> of 25 per cent on Canadian imports into the US, except energy, which would be taxed at 10 per cent. <\/p>\n

After decades of free trade between the US and Canada<\/a>, the American president\u2019s tariff threat to a relationship worth C$1.3tn ($91bn) has prompted a reckoning among policymakers about how to curb the country\u2019s dependence on its southern neighbour \u2014 and how to recalibrate its economy. <\/p>\n

\u201cCanada\u2019s strategy for the past 30 years has relied on trade agreements\u2009.\u2009.\u2009.\u2009that Trump has disrupted, and no longer can be relied on as a business case for Canada,\u201d said John Manley, a former finance minister. <\/p>\n

Trudeau has summoned chief executives, policy experts and labour unions to Toronto alongside his Council on Canada-US Relations, which includes the heads of major auto parts companies and several former provincial premiers. <\/p>\n

His effort to rally the business community reflects an anxiety that Canadian companies may no longer enjoy unfettered access to the world\u2019s biggest economy. <\/p>\n

Trump\u2019s threatened trade war comes at a time of acute political turmoil for Canada. Trudeau last month suspended parliament to buy time for his governing Liberal party to choose a new leader before facing a general election this year. <\/p>\n

The prime minister is leaving office with a dismal popularity rating, but his handling of Trump has won praise even from opponents. Trump\u2019s threat to Canada \u2014 and his frequent taunts \u2014 have sparked a burst of patriotism. <\/p>\n

More than 90 per cent of Canadians now favour greater economic independence from the US, up from 59 per cent before Trump\u2019s tariff threat, according to a poll from the Angus Reid Institute. <\/p>\n

\u201cTrump should be the wake-up call. We have a really big economic challenge on our hands\u2009.\u2009.\u2009.\u2009We have been so complacent in relying on the United States,\u201d said Martha Hall Findlay, director of the School of Public Policy at the University of Calgary. <\/p>\n

Over 50 years Canada has fallen from being the sixth most-productive economy in the OECD to 18th in 2022. In the G7, it now ranks sixth. Labour productivity in 2024 was 1.2 per cent below pre-pandemic levels, having fallen in 14 of the past 16 quarters.<\/p>\n

International trade has grown twice as fast as internal trade since 2010, according to Scotiabank Economics. Canada sends 77 per cent of its exported goods to the US, and no other marker is bigger than 5 per cent, Scotia said. <\/p>\n

Among the loudest complaints from industry and some experts is that Canada\u2019s leaders, including Trudeau, have not built energy infrastructure to allow Canada to sell its oil and gas overseas. <\/p>\n

The Trudeau government did fund the Trans Mountain Expansion pipeline to Canada\u2019s west coast \u2014 allowing more exports to Asia \u2014 that opened in May last year after more than a decade of development and at a cost of C$34bn, four times over budget.<\/p>\n

But the Trump turmoil has reignited debate over previously cancelled projects such as Energy East, which would have sent oil from Alberta to as far away as Canada\u2019s eastern Atlantic coast, and Northern Gateway, another project to export heavy oil to the Pacific coast.<\/p>\n

\u201cIf we cut the red tape we could have a pipeline built in two years,\u201d said Adam Waterous, chief executive of Strathcona Resources, Canada\u2019s fifth-largest oil producer. <\/p>\n

He added the US bought \u201cliquid gold at liquid silver prices\u201d because \u201cCanada has no other options\u201d but to ship most of its oil to refiners south of the border. <\/p>\n

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A sign in a store in Halifax, Nova Scotia, urges buyers to \u2018look for local instead\u2019 of purchasing US wine <\/span> \u00a9 Reuters <\/span><\/figcaption><\/figure>\n

Andrew Leach, an energy and environmental economist at the University of Alberta, said huge investment was needed to build pipelines but the projects also needed backing from Canada\u2019s provinces, First Nations groups and environmentalists as well as the federal government.<\/p>\n

The country\u2019s oil industry would \u201chappily move oil and gas to the west coast instead of the US midwest, it makes sense to do this\u201d, he said. \u201cBut this recent blaming of Trudeau for the lack of pipeline options seems to forget the Conservatives were in power for a decade before him.\u201d <\/p>\n

Since Trump\u2019s tariffs threats in recent days, politicians have been quicker to swing behind boosting Canada\u2019s internal trade. <\/p>\n

Canada\u2019s provinces protect their local industries such as farming and alcohol. Differing regulation means workers cannot always move their credentials to other regions. Truck drivers also face headaches, including different rules for the weights of vehicles in different jurisdictions at different times of the year. <\/p>\n

Trudeau\u2019s minister of internal trade, Anita Anand, has been leading efforts to break these barriers \u2014 a move she said \u201cwill potentially add up to C$200bn to the Canadian economy\u201d. <\/p>\n

But decades of effort have gone into easing this internal trade friction, and the obstacles remain.<\/p>\n