Canadians, brace for impact if Donald Trump is elected president on Nov. 5.
Forget the long-standing Ottawa-Washington friendship, the trade and security alliances, the integrated economy connecting businesses with consumers on both sides of the border.
With the radical Republican candidate, nothing is sacred. Everything is renegotiable. This is the dark art of Donald Trump’s deal.
Prepare instead for a frenzy at the border, tariff wars that side-swipe the Canadian economy and disputes over Canada’s laggardly approach to defending North America and the world.
Prepare for outright hostility if it is Prime Minister Justin Trudeau squaring off against Trump. But don’t expect substantial differences if Conservative Leader Pierre Poilievre wins power.
“It’s going to be a free for all, let’s face it,” said Lloyd Axworthy, a former Liberal immigration minister.
“I think Canada more than almost any other country will be impacted simply because so much of what we have is integrated or interdependent with the United States.”
The Star spoke to policy experts to find out where Canada is most vulnerable to the impacts of a Trump presidency.
Defence
America’s traditional role as a global arbiter and police force could drastically change under Trump and that could adversely affect Canada both abroad and at home.
Trump has vowed to end the Russia-Ukraine war in order to limit American spending. Owing in part to its large Ukrainian diaspora, Canada has been one of Kyiv’s staunchest backers, but the NATO alliance that is contributing to Ukraine’s defence has been an object of Trump’s scorn.
Earlier this month, he spoke of his disregard for NATO’s collective defence pact, boasting that he had told member states during his first term that if they did not pay the agreed-upon two per cent of GDP on defence spending, “I will not protect you under any form.”
Canada is one of NATO’s most notorious financial laggards, this year spending just 1.37 per cent of GDP on defence — 27th out of the 31 member states. At the last NATO summit, Trudeau pledged that Canada had a plan to meet the two per cent spending goal, but not until 2032.
“We’re already more vulnerable on security writ large,” said Kerry Buck, Canada’s former ambassador to NATO. “U.S. unpredictability under Trump would make it worse for us.”
The impact could occur on two fronts.
A weakened NATO could reduce Canada’s global influence and the country’s abilities to act internationally alongside other like-minded nations. But Trump could go further, according to his former national security adviser.
If Trump undermines NATO solidarity or its existence, Buck said, “it can take away any or all of those advantages that we have.”
And Canada isn’t much better positioned on the home front where it is seen as a weaker partner in the task of continental security. Buck said the argument that Canada poses a security threat to the United States is “politicking.”
“But I do think there’s a risk to Canada from Canada underinvesting (in military defence) and the only reason we’re able to do it is because we count on the U.S. looking out for us,” she said. Under a Trump presidency, “they’ll be either unpredictable or unwilling to do so.”
Immigration
In his first presidential term, Trump promised to build a wall along the southern border to keep irregular migrants out of the United States.
Getting tough on migrants is still among Trump’s top election pledges. This time, he plans “the largest deportation operation in the history of our country” if he wins.
Such a threat inevitably turns the focus to Canada’s border with the United States.
In the spring of 2017, Trump banned entry into the U.S. from seven Muslim countries and warned migrants from at-risk countries like Haiti, El Salvador and Honduras that they should prepare to be returned to their home countries.
Experts predict that history could repeat itself in a second Trump term, with some changes.
“If — and I should say, maybe, when — he starts his major deportation effort, there will be a massive outpouring of people looking for an alternative,” said Axworthy, who is chair of the World Refugee & Migration Council.
“If he’s beginning to use the national guard and the police to enforce the deportations then all hell’s going to break loose and people will be scrambling to find a place to go.”
Sean Rehaag, director of York University’s Centre for Refugee Studies, has little doubt those threatened with deportation will once again head north to Canada. But their journeys will be more dangerous and difficult than they were the last time Trump was in the White House.
In 2023, Trudeau and U.S. President Joe Biden agreed to amend the Safe Third Country Agreement, a deal that allows for the return of irregular migrants to the country in which they first set foot. The amendment closed a loophole that allowed those who cross into Canada from the U.S. at unofficial points, like Roxham Road, to make their asylum claim in Canada.
Rehaag said this will only increase migrants’ reliance on human smugglers guiding them through more difficult-to-detect routes. One need only look to the enormous risks migrants take in crossing the Mediterranean Sea or the English Channel to get to Europe or the United Kingdom to see what could happen along the 49th parallel.
“To think that phenomenon won’t happen in Canada with enough pressure in the United States is, I think, unreasonable,” Rehaag said.
Ottawa will either be duty-bound or compelled by court challenges to scrap the Safe Third Country Agreement if Trump follows through on his promises
“The idea that an agreement based on the fact that both countries have a reasonably humanistic refugee program is clearly no longer going to be the case,” Axworthy said.
“If Trump makes good on his promises of removing people … then Canada can’t remove people to the United States if (it) knows that by doing so they’re going to be returned to a country where they’ll potentially face persecution,” Rehaag said. “It would violate international law to do so, and it would violate Canadian law.”
Trade
It could be felt in grocery stores, at car dealerships, in the housing market and even in the arts.
If Trump wins the election, he wants to put the American economy first. And he plans to do it with tariffs intended to make it more enticing to build and hire and buy in America than to do business with foreign firms.
Economists predict Trump’s tariff policies will be bad for the global economy — including the American economy. But it could be particularly disastrous for Canada, which owes much of its prosperity to its access to U.S. consumers and markets.
“Were a Trump administration to decrease U.S. reliance on trade, prioritizing domestic production and ensuring national independence of essential goods and services, Canada could expect the value of our trading relationship with the United States to decline,” warned the Calgary Chamber of Commerce.
The situation could grow even graver in a situation where there are trade wars and retaliatory tariffs from other countries, particularly China.
Canadian exports could experience a COVID-19-style drop, inflation will take hold, the value of the dollar will weaken, interest rates will rise, the stock market will fall, consumer spending will slow under a “Full-Blown Trump Scenario,” according to a September report by Oxford Economics, published in the magazine Policy.
“We are sitting on top of the wealthiest, most dynamic economy in the world and that’s never going to change,” said Brian Kingston, president and chief executive of the Canadian Vehicle Manufacturers’ Association, which includes Ford, General Motors and Stellantis.
Motor vehicles are Ontario’s top export to the U.S. and Canada benefits from a duty-free deal under the United States-Mexico-Canada Agreement (USMCA). But Trump says he wants to renegotiate that trade deal when it comes up for review in 2026.
His stated reasons are to prevent Chinese companies producing electric vehicles from building factories in Mexico to enter the American market, but “there’s always a risk, particularly in a trilateral trade negotiation, where the measure that may not be aimed at Canada ultimately impacts us,” Kingston said.
He said Ottawa needs to work diligently to resolve trade irritants between the two countries and send the signal to Washington “that we are their partner in the creation of this North American automotive supply chain.”
But Canada also has some powerful ammunition, in the form of critical minerals needed to produce electric vehicle batteries.
“You cannot source these materials anywhere else in North America, and we’re perfectly positioned to be that partner,” Kingston said.
“It gives us a unique opportunity that we didn’t have the last time we were in these (trade) discussions with the first Trump administration.”
Energy and the environment
One of the early acts of office when Trump was first elected was to approve the Keystone XL pipeline, which would have sent Alberta petroleum flowing across the border and given a massive boost to oilsands producers.
This time, Trump isn’t looking north to fill its energy needs.
“We will DRILL, BABY, DRILL, and we will become energy independent, and even dominant again,” the Republican Party platform says. “The United States has more liquid gold under our feet than any other nation, and it’s not even close.”
This, plus his promised tariffs on foreign products could cause Canadian energy imports to decline.
But the bigger uncertainty for Canada is if, or how drastically, Trump plans to roll back American environmental policy, said Jennifer Winter, a professor of economics at the University of Calgary.
Trump has vowed to undo some aspects of American anti-inflation measures that have gone to fund clean energy projects while attempting to reduce the reliance on China for things like renewable energy and electric vehicle batteries. He has also vowed to weaken emissions targets and pull out of the global Paris climate accord.
The Oxford Economics report said that Trump’s decisions could have various impacts on investment in Canadian clean-energy technologies, battery production or electric vehicle manufacturing, but classified the effects as a “mixed bag.”
But if Trump pulls support for clean-energy initiatives, “it could make Canada relatively more attractive for green investment.”
“I think it really depends on how aggressive Trump wants to be in isolating from the rest of the world on the climate file,” Winter said, adding that no one has yet been able to separate the campaign rhetoric from the firm policy plans to anticipate what could be coming just months from now.
“Trump being president would create additional U.S. policy uncertainty and global policy uncertainty, and that’s just bad for everyone.”
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Publish date : 2024-10-27 00:38:00
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