The U.S. president is turning the world economy upside down, holding everyone hostage in the process. Canada’s position is especially precarious. After decades of the U.S. pursuing a neoliberal agenda with free trade, deregulation and privatization, Canada is deeply integrated into the U.S. economy, with supply chains, infrastructure and trading systems facilitating this north south economy.
Now tariffs and uncertainty are the order of the day. Nations around the world have tried to understand Trump’s rationale, to negotiate, and some to retaliate. Canada has tried all these approaches.
Canadians struggled, at first, with how to push back at President Trump’s aggressive attitude to America’s closest trading partner. Then they began reacting by booing at sports events. These eruptions seemed to give confidence to others and soon, “Buy Canadian” campaigns were breaking out, reinforced by elbows out rallies. Still, many felt we needed to do more.
We are left with on again off again tariffs, creating insecurity for workers and a scramble for many companies. We can’t know how many jobs will be lost, how much investment will be pulled back or how high prices will go. There is no doubt that the world trading system is changing abruptly, and we don’t know where it will end up.
Progressives—including the Canadian Centre for Policy Alternatives—argued against the 1988 Free Trade Agreement (FTA) and in favour of “managed trade”; trade with safeguards to protect national economies, such as the 1965 Auto Pact, which guaranteed proportional production in both Canada and the U.S.
The 1988 Canadian election was a “free trade” election, where that issue dominated the campaign. Business was squarely in favour of greater U.S. integration. The opposing side warned of undermining Canadian culture, social programs and regulations.
The impact of the trade deal was to put greater pressure on Canada “to compete” with the U.S., by lowering taxes and cutting budgets, and, thereby, limiting infrastructure investment and social spending.
Fast forward to the present: Canadian business commentators are shocked that their largest trading partner could turn against them. But they never let a good crisis go to waste.
Very quickly, they trotted out the weathered old solutions: build more pipelines, cut taxes, reduce regulations to promote interprovincial trade, reduce government spending. In other words, get government out of the way so that business can operate more efficiently. Free market solutions that got us into our current situation—such as more tax cuts, deregulation and a race to the bottom, won’t get us out.
By the way, many of these worn-out solutions remain on offer by the two main party leaders…
When all you have is a hammer, every economic challenge looks like a nail.
The spectre of Donald Trump hovers over the current Canadian federal election campaign. Leaders are tossing out ideas and press releases, often with few details and no costing. There has been little substantive debate about the Trump challenge, and few solutions offered. We still don’t have fully costed party platforms to understand how serious the campaign pledges are or if there is the money to pay for them. Parties are promising massive tax cuts and to balance the federal budget. This is simply magical thinking. How can we compare parties and hold leaders to account before voting?
This is a unique opportunity for progressives to advance solutions that will grow our economy, create well-paying jobs and exert more national control. The priority is protecting those workers negatively affected by Trumps tariffs. The Employment Insurance (EI) system in Canada is so inadequate that the majority of laid off workers can’t claim benefits even though they pay into the program. Labour laws need to increase protection for layoff and severance pay.
When big economic changes are happening, it’s the time to think of big alternatives that could reshape our society to better meet the needs of Canadians.
Strengthening the ties that link us, as a country, such as culture, media and education.
Creating jobs while reinforcing our commitment to protecting the environment.
Investing in affordable, social housing, and implementing rent controls and price limits on key food essentials.
Some are, once again, arguing that it’s not enough to just buy Canadian; we need to also own Canadian. Deregulation and privatization have led to greater market concentration, poorer service and higher prices. Why can’t we protect key services, infrastructure and other businesses by once again taking an ownership stake?
This is the time to think big. If we don’t, the same tired solutions will seem like the only way forward. We can do so much better as a country.
Peggy Nash is executive director of the Canadian Centre for Policy Alternatives (CCPA).
