While the immediate danger of a 25 percent Tariff on Canadian exports to the US have been “paused,” the threat remains. Indeed, for the foreseeable future under the administration of Donald Trump, the tariff threat will continue to swing like the Sword of Damocles over all Canadians.
Any promises or guarantees offered by the current U.S. government should have little purchase with Canada. We should proceed as if tariffs or other punitive economic measures are inevitable. Certainly, the hopes of appeasing the President by bending to his every whim—as exemplified by Saskatchewan and Alberta Premiers Scott Moe and Danielle Smith, respectively—will do little but validate to the Americans that threats work. Rather than beg and plead, we should get on with building a country that is less dependent on the whims of our neighbour to the south.
There are options here—from repatriating U.S.-owned assets in Canada, to developing a public sector-led green industrial strategy, Canada needs to take bold action now in the face of this threat. Doing so will secure us greater independence in addition to building the just and green economy that this moment demands.
There was a time when Saskatchewan recognized the need for independence and control over our own economic livelihood. Allan Blakeney’s NDP in the 1970s demonstrated the possibility of using the state to intervene in the economy to channel the benefits of the province’s resource wealth—often through public ownership—into an expanded health and social safety net. Under Blakeney, the Saskatchewan government nationalized 40 per cent of the province’s potash industry, created SaskOil—the first state-owned oil and gas company in North America—and owned significant stakes in uranium and other mining ventures.
Faced with a recalcitrant and largely American-owned potash industry that refused to share information on production with the government and fought newly-imposed tax changes through the courts, Blakeney refused to become a mere “spectator to the development of our own resource.” Nationalization of potash, he said, would make Saskatchewan “a master of its own house.”
A similar desire to exercise greater control over our resources animated the creation of SaskOil. In 1973, Blakeney’s government would impose a 100 percent windfall tax on oil profits and expropriate the mineral and exploration rights of 24 companies to create the provincial crown. Less than ten years later, SaskOil had amassed $191 million in assets; it was also bringing in $60 million in gross revenues annually, and contributing $26 million in annual royalties to the government. As Blakeney put it, “We hoped that we could encourage people to regard the future as not wholly determined by decisions made by foreign resource companies, but to be partly determined by Saskatchewan people themselves.”
But while we can understand the tariff threat as an urgent call to once again be “masters of our own house,” there are others that see it as an opportunity to further their own business interests.
The tariff threat is also being used by Canada’s business lobby to justify the removal of what they deem “internal trade barriers” in Canada. As Stuart Trew and Chris Roberts note, these barriers are often more the product of different provincial governments promoting their own industries—or health and safety regulation and consumer protection for their respective workforces.
The Saskatchewan Chamber of Commerce has been keen to portray these provincial differences in regulation as a significant barrier to trade, but as CCPA Economist Marc Lee reminds us, “the trucking standards you have in (prairie) Saskatchewan are not going to be appropriate to those in (mountainous) British Columbia.” While there may be some tweaking that can be done in regard to standardizing things like paperwork or licensing across provinces, these types of “barriers” don’t in any way constitute a “internal 21 per cent tariff,”as the Canadian Chamber of Commerce has characterized it.
Rather, much of this push from the business lobby is really to deregulate things like provincial environmental standards, health and safety standards, and consumer protections. The CCPA’s Trade and Investment Critic Stuart Trew rightly encourages us to ask what specific barriers these business groups are really asking us to eliminate.
The tariff threat could offer us a unique political movement to re-think our Canadian federation, but will it be one that prioritizes a green economy, Indigenous reconciliation, and the refurbishing of our health and safety net for all Canadians? Or will it be one that asks us to join in a race-to-the-bottom on taxes, on the environment and on health and labour standards, for the sole benefit of Canadian business?
The business lobby is already working hard to answer that question in a way that works for them. Progressives should be wary of parroting their lines in this moment of increased nationalism. Despite the external threat from the United States, Canadian workers still have different interests than their bosses—and we can’t let the bosses’ “solutions” dominate the conversation.