WATCHING WARILY
Canada’s close relationship with the United States has been rattled by the election of Donald Trump. Canadians are worried about how the Republican’s campaign promises — if fulfilled — could reverberate north of the border. Here are the key issues to watc
How election outcome will reverberate north of the border, in areas from trade to climate change to security,
TRADE Donald Trump made radically overhauling U.S. trade arrangements a key issue in his campaign, and this issue could have the greatest effect on Canada after he takes power.
The president-elect campaigned on a pledge to force Canada and Mexico to renegotiate the North American Free Trade Agreement (NAFTA), to provide greater benefits to U.S. businesses.
If the countries don’t agree on a new deal, Trump has promised to leave NAFTA completely.
Combined with a pledge to withdraw from Trans-Pacific Partnership talks and take a more aggressive line on trade with China, Trump pitched isolationism and independence as a way to increase jobs, fix crumbling infrastructure, even reduce crime.
“All of these things, and so much more, are possible. But to accomplish them, we must replace the present policy of globalism — which has moved so many jobs and so much wealth out of our country — and replace it with a new policy of Americanism,” Trump said in a September speech.
About $51 billion in goods cross the Canada-U.S. border per month, according to TD Economics. CLIMATE CHANGE Hard-won progress in the fight against climate change will be dramatically rolled back if Trump sticks to his word.
Trump vowed to back the United States out of the 2015 Paris agreement, a landmark international climate treaty aimed at curbing emissions and limiting global temperature increases.
Trump has also pledged to revive the coal industry, relax restrictions on polluters and expand exploration and drilling for fossil fuels.
The Paris agreement, ratified by the House of Commons in October, commits almost 200 nations to reduce greenhouse-gas emissions with a goal of limiting global temperature increases to under 2 C. The U.S. and China, the world’s two largest emitters of greenhouse gasses, were crucial to reaching the deal.
Trump previously suggested climate change is a “hoax” perpetuated by China to hurt U.S. business.
It’s unclear what Trump’s energy agenda will mean for Canada, where the Liberal government has made environmental protection one of its main priorities. In October, Prime Minister Justin Trudeau announced Ottawa would enforce a national carbon-pricing plan. ECONOMY Global financial markets twitched early Wednesday on news that Trump had emerged the surprise victor.
But Trump’s long-term plan to boost the U.S. economy — creating 25 million jobs and spurring growth through tax cuts and infrastructure spending — could help boost Canada’s economic fortunes, too, if the president-elect can make it happen, said Craig Alexander, senior vicepresident and chief economist at the Conference Board of Canada.
“That should help lift economic growth and to the extent that happens, that’s really good for Canada,” Alexander said.
The election of a Republican president and a Republican-controlled Congress may breathe new life into the Keystone XL pipeline. The controversial project, meant to carry Alberta crude oil to refineries on the U.S. Gulf coast, had been sidelined by the Obama administration because of environmental concerns.
During the campaign, Trump said he would approve the line but wanted a “piece of the profits.” On Wednesday, TransCanada, proponent of the pipeline, said it “remains fully committed” to building the line and said it was evaluating ways to engage the new administration on the merits of the project. BORDER Trump vows to build a wall on the U.S.-Mexico border but rejected a wall on the border with Canada as too long, too expensive and unnecessary.
Yet it’s far from clear if a Trump administration will honour deals to ensure a thinner, smoother border to the north. Canada and the U.S. have a “perimeter” approach to economic and border security that saw countless travel and security screening procedures harmonized. Bills to enable more information-sharing on entries and exits, and more preclearance of cross-border travellers are now before Parliament and the U.S. Congress. Canadian ambassador David McNaughton is “quite optimistic” a lame-duck Congress will pass the necessary legislation because of bipartisan support before a new administration takes over.
But the business community worries if NAFTA collapses, the flow of goods and people across the border could be choked by tariff and nontariff regulations and/or stiffer immigration controls in the guise of security concerns. McNaughton says he’s nevertheless “open” to discussions about reopening NAFTA. FOREIGN POLICY Canada is re-engaging with the United Nations on climate change, Syrian refugees and peace operations, just as Trump has signalled America is hunkering down to look after itself.
Trump’s campaign talk worries America’s military allies in Eastern Europe and Asia. He mused about resetting relations with Russia, pulling troops out of South Korea and using tariffs to compete with and halt a rising China — all of which reverse long-standing U.S. policy.
He condemned the U.S.-brokered deal with Iran to limit its nuclear program and lifted sanctions while Trudeau used it as a springboard to re-engagement with Iran.
Trump said he would require NATO “freeloaders” to pay full freight or forget about U.S. protection. Canada, which is leading the NATO mission in Latvia, spends only about 1 per cent of GDP on NATO, less than the 2-percent-of-GDP goal for NATO members.
McNaughton said Canada will not shy from discussions with a new Trump administration around military alliances, including NORAD, which he said could be modernized. “It’s easy to throw around numbers,” said McNaughton. “Some people when they want to talk about defence, send their accountants out and we tend to send our soldiers out.”