“Trump’s political goal is to deliver jobs to Americans … He’s not targeting Canadians, but nonetheless we’re going to be road kill,” was the chilling assessment from Ian Lee, associate professor at the Carleton University Sprott School of Business.
However, an unintended consequence of a Trump presidency could well be the rebirth of Canada as a nation.
It’s possible that Donald Trump will be a more cautious president than he was a candidate. Nevertheless, his promise to deal with unfair Chinese trade practices, veto the TPP (Trans-Pacific Partnership) agreement and renegotiate North American Free Trade Agreement (NAFTA) would radically alter the global economy. Even the threat has altered the global economic agenda; nationalism and protectionism are on the rise.
These developments should be a wake-up call for Canadians, for we have been sleepwalking into an over-dependency on the United States. It is coming back to haunt us.
The NAFTA agreement created a free trade zone for Canada, the U.S. and Mexico. It morphed out of the previously negotiated Canada/United States Free Trade Agreement signed the ’80s. The original deal was very controversial in Canada, to say the least. The 1988 election in Canada was fought almost entirely on the issue and although Brian Mulroney’s Progressive Conservatives formed the government, a majority of Canadians voted against free trade with the U.S.
Canadian nationalists lost that round, and the consequences were profound. Today, almost three-quarters of Canada’s trade is with one country – the U.S. Daily trade in goods between the two nations is, on average, in the range of $1.5 to $2 billion; we have been each others biggest trading partners for decades. The cross-border totals for 2015 were approximately $280 billion, down from $312 billion in 2014.
A Trump presidency could force a major rethink in how Canada works. Presently, provinces in Canada operate like independent fiefdoms; many have erected irrational, impenetrable restrictions to cross-Canada trade. NAFTA has made north-south trade easier, while inhibiting the evolution of an integrated Canadian economy.
Even worse, the relative success of NAFTA has unraveled many of the ties that bind Canadians and inhibited the development of a national strategy.
What might that new national strategy look like? Trump has promised to lower corporate taxes, to abandon the Paris Accords (thereby cancelling planned carbon taxes in the U.S.), to support the United States coal industry and therefore sustain lower energy prices for American businesses.
These developments would place Canadian businesses at a competitive disadvantage. Although the advantages to U.S. companies would be offset somewhat by a predicted fall in the value of the Canadian dollar, they would force Canadian businesses to look inward for markets and new opportunities.
Achieving an internal Canadian free trade agreement would demand a level of Canadian compromise that has not been seen for decades. It would require Canadians to face down some hard realities, the Franco-Anglo linguistic divide, simmering western estrangement, Atlantic Canadian cultural partialities and the historic grievances of indigenous peoples in Canada.
To rise above our latent particularism Canadians need a vision of the future that would be worth all the pain and effort. And that means thinking big, imagining a Canada of tomorrow that is proud and self-sufficient. It means building a nation that is united, tolerant, responsible and very much bigger than the Canada of today.
Imagine a Canada of the mid 21st century that is 100 million strong, where a second bilingual, multi-ethnic Canada has been constructed in the mid-zone, the warming heartland that lies north of present Canadian population.
Such a nation would be economically self-sufficient, with internal markets big enough to support our domestic manufacturing, our growing agricultural producers, our domestic energy industry and providing a place for the many presently isolated indigenous communities, lifting them out of poverty and despair.
Of course, this new Canada would necessarily interface with the world, and would need to develop global trading expertise and the infrastructure to accomplish that goal. But breaking free of our over-dependency on the U.S. is perhaps the first step in achieving that goal.
Over the past 30 years, Canadian nationalism has been on hold, over-ridden by internal conflicts and the promise of continental integration. It would be ironic if Donald Trump were the author of a new, united and independent Canada.
Robert McGarvey is an economic historian and former managing director of Merlin Consulting, a London, U.K.-based consulting firm. Robert’s most recent book is Futuromics: A Guide to Thriving in Capitalism’s Third Wave.