A trade war between Canada and the United States that keeps ratcheting up will only lead to more pain for everyday Canadians.

When President Donald Trump imposes tariffs on Canadian goods going into the United States, it makes those goods more expensive for Americans. And every time Canadian politicians decide to slap tariffs on American goods coming into Canada as a response, life becomes more unaffordable for Canadians.

That’s because tariffs are taxes imposed on domestic consumers. They are not, contrary to messaging coming out of the White House, taxes paid for by foreign countries.

Of course, Canadians want to see their leaders respond when Trump imposes tariffs on Canadian goods being sold to the United States. Trump’s tariffs are poised to cause Canada’s GDP to contract by between 2.5 and 3 per cent this year, which will surely cause a recession.

But hitting back with tariffs of our own only increases the pain being felt by Canadian consumers and will only deepen the recession Canadians are staring down this year.

Australia’s political leaders seem to have figured this out. Their government is choosing not to respond in kind to Trump’s tariffs on Australian steel and aluminium.

“Tariffs and escalating trade tensions are a form of economic self-harm and a recipe for slower growth and higher inflation,” said Australian Prime Minister Anthony Albanese. “They are paid for by consumers. This is why Australia will not be imposing reciprocal tariffs on the United States.”

How, then, should Canada respond to Trump’s tariffs? Here are just two of many solutions: tearing down internal trade barriers and unleashing Canadian energy.

Many Canadians would be stunned to know that Canada has trade barriers between our provinces that are nearly as high as the tariffs Trump imposed on Canada earlier this month.

That’s right: because of roughly 400 carve-outs to Canada’s internal free trade deal, goods being traded from one province to another face the equivalent of a 21 per cent tariff on average.

Canadians are rightly indignant at the tariffs the U.S. administration has imposed on Canada. But Canadians should also be angry at our provincial governments, which have created a system of internal trade barriers that, prior to the current trade war, made it easier to trade with the U.S. than within Canada.

That must change.

Nova Scotia Premier Tim Houston is leading the way on this file and has pledged to remove Nova Scotia’s barriers to trade with any other province that will reciprocate. And the federal government has sent signals that the provinces appear willing to move quickly to tear down internal trade barriers given the circumstances.

Canada’s provinces must agree to tear down all internal trade barriers as quickly as possible. The boon this would be for the national economy would virtually offset the impact of the Trump tariffs.

The federal government must also stop shooting the Canadian economy in the foot by blockading crucial energy projects that represent the key to diversifying our international trade.

Since the Liberals came to power in 2015, they have blocked more than $670 billion worth of energy projects that would have sent western Canadian oil, natural gas, and petroleum products to eastern Canada, Europe, and Asia. 

Canada should be an energy superpower, but for the past decade the feds have stood in the way.

It’s time to get energy projects built and allow our energy to power the world. Right now, most of our energy exports go to the United States. With better pipeline infrastructure, Canada can diversify and send more oil and natural gas to Europe and Asia, two regions desperate to get more clean and ethical Canadian energy.

Under the Trudeau government, countries from Europe and Asia begged the feds to develop more Canadian energy and export it to the world. Former prime minister Justin Trudeau told them there was no business case.

That sentiment was wrong then and it’s even more wrong now. It’s time to build pipelines and sell Canadian energy to the rest of the world. Pronto.

Canada should respond to U.S. tariffs by making our economy more self-reliant and by exporting more of our key products to new markets.

The Trump tariff threat will be present for the next four years. Slapping more taxes on Canadians isn’t a long-term solution. Diversifying our economy is.

Originally published here

Ontarians are also watching Ford closely to make sure he doesn’t take his eye off the ball when it comes to other critical issues. Pictured: Ontario Premier Doug Ford. Photo Credit: Doug Ford/X. 

After a cold and snow-filled election, Ontario Premier Doug Ford emerged as the victor, although he did not make the electoral gains he had hoped for. He was given the third mandate he desired to lead Ontarians through a difficult time marked by a trade war and a fracturing relationship with the United States. However, Ontarians are also watching him closely to make sure he doesn’t take his eye off the ball when it comes to other critical issues. 

Tariffs are not the only government policies set to harm Ontario consumers in the days, months, and years of this renewed majority government. Interprovincial trade, housing, alcohol policy, and broadband internet are all topics that are important to Ontarians and must be addressed. 

Canada’s premiers have long put interprovincial trade on the backburner, seeing it as something that was nice in theory but too difficult to achieve in practice. They wasted an enormous amount of time not making it a reality for the good of Canadian consumers and as an escape hatch in case of economic disaster like the one Canadians are now facing in a Canada-United States trade war. The lack of interprovincial free trade is costing consumers immensely, already by robbing our economy of more than $200 billion a year. Other premiers need to follow Nova Scotia Premier Tim Houston’s lead immediately and introduce reciprocal domestic trade legislation. Ford has indicated he plans to do just that, but he should make it an early priority for his new government. 

In addition to interprovincial trade, Ford should set to work coordinating with the federal government to ensure Ontario diversifies its economy by building trade relationships with countries other than the United States. Consumers benefit when they have more economic choice, and this will allow for items to be exported and imported at a lower cost with much more stable and predictable partners. 

Ontarians feeling the financial pinch are more than likely also struggling to buy a home. The election was full of ideas and promises when it comes to housing, with the most prominent being rent control from Marit Stiles, the leader of Ontario’s NDP. Economists have long argued that rent control is actually very bad for low-income people looking for housing. However, even though Ford has peeled back this bad policy, the housing crisis persists. 

There is a housing crisis because there are not enough units to house people. And there are not enough units to house people because of outdated red-tape from the federal, provincial, and municipal governments. The Ford government is falling short of its own housing targets. Ford can take ownership of the slowdown experienced at the provincial level and work with his federal and municipal colleagues to make it easier and more attractive for builders to build. Ford has announced billions of dollars in new spending on housing and other projects, but this will turn out to be meaningless if developers are stuck in red tape. 

On the alcohol front, Ford has done more than any other premier in Ontario history to liberalize alcohol sales, but there is more to be done that will benefit both Ontario consumers and small and medium-sized businesses. The LCBO remains the only retail store that can sell spirits. Ontarians looking to buy whisky, vodka, or gin from their grocery or convenience stores are out of luck. Why liberalize alcohol and get stuck on this very simple detail? If wine can be sold in grocery stores, so too should vodka. The LCBO should be given less power, not niche areas of control. 

Ford should also promise not to build any more LCBO retail spaces, and indeed close retail stores that are no longer needed due to the amount of convenience and grocery stores surrounding it, and save the Ontario consumer money on retail rent and on running an inefficient operation. If you compare the LCBO’s operations to comparable private retailers in Alberta, it costs the LCBO approximately $1,000,000 more per store in operation costs. With 669 LCBO stores being inefficiently run in Ontario, that’s a lot of wasted money the government could otherwise spend on Ontarians’ core priorities, making the problem even worse simply doesn’t make financial sense. 

Finally, Ford has, under pressure, ripped up the contract Ontario had with Starlink. While perhaps understandable given the current trade dispute, the bad news is that Starlink was supposed to provide desperately needed high-speed internet access to 15,000 homes and businesses in rural and remote communities by June 2025. Now that this contract is cancelled, and assuming the relationship between the province and Elon Musk’s company is now strained, Ford must put significant effort into finding alternative companies to take on that project. It is outrageous that rural Ontarians do not have access to reliable internet when the economy and their lives rely on being online. Businesses in rural Ontario are also struggling to succeed in a modern economy without access to the internet, and the lifeline they thought was coming is now no longer an option. Businesses that are already in rural areas are struggling, and businesses who many want to start in rural areas will be scared away. This will only depress the local economy and isolate rural communities even further from the rest of the province.

Ford would do well to keep in mind that Ontario is a complex province with many problems to be addressed, even during a trade war and in its aftermath. Ontarians elected him to guide them through this turbulent time, but also to strengthen the economy, make their lives more consumer-friendly, and support the growth of businesses in the province. While much of the present focus is on the trade war, Ontarians still have many other pressing issues that need to be dealt with.

Originally published here

Canada is set to get a new prime minister at a moment when the stakes could not be higher: the nation is in the midst of an unprecedented trade conflict with its biggest trading partner.

To date, the federal Liberal government has lacked a sense of urgency in responding to the crisis. Mark Carney, Canada’s prime minister-designate, has a chance to change that by shifting the feds’ approach to energy projects and eliminating internal trade barriers.

U.S. President Donald Trump has been talking about imposing tariffs on Canada for the past three months. Unfortunately, Prime Minister Justin Trudeau spent months acting as if the tariff threat wasn’t real.

Trudeau only belatedly started taking actions to strengthen Canada’s border security as the clock ticked down the zero hour, in a desperate last-minute attempt to meet Trump’s demands.

Yet according to Trump, Trudeau failed to take enough action. Some punishing tariffs are already hammering Canada’s economy, while others are set to take effect early next month.

It’s long been evident that Trump’s decision to impose sweeping tariffs on Canada’s economy is not just about fentanyl crossing the border: less than one per cent of the fentanyl entering the United States comes through the northern border. 

His major goal is clearly to cripple Canada’s economy in an attempt to get companies to move their jobs and economic activity to the United States.

How should Canada respond?

There are at least two key areas where immediate action is needed: unleashing Canadian energy and tearing down Canada’s internal trade barriers.

Since the Liberals came to power in 2015, $670 billion worth of natural resource projects have either been cancelled or put on hold by the federal government.

The feds have blockaded projects like Energy East, Northern Gateway, and Énergie Saguenay that would have sent tens of billions of dollars’ worth of Canadian oil and natural gas to Asia and Europe, and allowed eastern Canada to be powered by Canadian energy rather than importing oil from dictatorships like Saudi Arabia.

No less than 77 per cent of Canada’s exports go to the United States, including $150 billion per year in oil, natural gas, and petroleum products. Canada needs to diversify. Trump’s tariff threats should have led to a sense of urgency, with the federal government reversing course and greenlighting some of the 31 energy projects it has stymied since coming to power in 2015.

Sadly, no action has been taken on the energy front. Just talk that the Liberals might have to reconsider their position on pipelines.

Carney is a well-known climate hawk. He’s talked about the need for 80 per cent of Canada’s natural resources to stay in the ground to fight climate change. 

But the moment demands a different approach. Unleashing Canadian energy is the key to diversifying our economy. Carney should shift the feds’ approach and approve energy projects that have been blocked over the past decade. If he doesn’t, Canadians will look to elect a new government that will.

Then there’s internal trade. Canada does have domestic free trade, but with a major caveat. There are more than 400 carve-outs to Canada’s internal free trade deal. The impact of those carve-outs is dramatic.

Because of the provinces’ non-tariff barriers on each other’s goods, Canada has a de facto 21 per cent domestic tariff when provinces want to trade with each other, according to the International Monetary Fund.

That means it’s easier to trade with a couple dozen countries Canada has free trade agreements with than it is for provinces to trade with each other.

Studies have shown that ending interprovincial trade barriers should be a bigger boost to the national economy than the cost of the tariffs the Trump administration has imposed on Canada.

Canada’s internal trade minister, Anita Anand, says progress has been made on eliminating int.erprovincial trade barriers, but the proof will be in the pudding.

Carney should convene a meeting of Canada’s first ministers immediately and demand that all internal trade barriers be torn down within 30 days.

Canada can’t afford to wait a moment longer.

Make no mistake: the Trudeau government has been behind the curve in responding to the Trump administration’s tariffs threats since day one. Carney has a chance to take a new approach by changing the feds’ approach to energy projects and finally pushing for a comprehensive deal on internal free trade.

If he fails to get this done, or lets ideology get in the way, Canadians will quickly be searching for a new prime minister who will.

Originally published here

Leaders across Canada have talked a good game about eliminating interprovincial trade barriers. Nova Scotia Premier Tim Houston is putting his money where his mouth is.

There can be no doubt about it: Interprovincial trade barriers are holding Canada’s economy back. The rules and regulations preventing the free flow of goods, services and workers across provincial borders is costing our economy more than $200 billion a year.

With U.S. President Donald Trump promising to bring in sweeping tariffs as soon as next week that would devastate the Canadian economy, it’s never been clearer that we need to trade more at home and boost economic activity within our borders.

Enter Houston.

At a campaign stop in support of Ontario Premier Doug Ford’s re-election bid, Houston announced plans to table a bill called the Free Trade and Mobility Within Canada Act in the Nova Scotia Legislature.

The legislation would take a reciprocal approach to trade barriers: According to Houston, Nova Scotia will eliminate any barriers standing in the way of trade with another province so long as that other province responds in kind.

In other words, so long as any other province is willing to drop its trade barriers and allow Nova Scotia’s goods, services, and workers to flow freely across its borders, Nova Scotia will do the same.

Canada’s internal trade barriers now represent the equivalent of a 21% tariff. Eliminating those barriers is critical.

Houston’s new legislation could be a game changer for the Canadian economy. Once Nova Scotia passes this bill into law, the onus will be on other provinces to reciprocate: if they want more access to the Nova Scotia market, all they have to do is remove trade barriers of their own.

In the past, provinces have been reluctant to remove trade barriers for a number of reasons. One is that even if a province removes a trade barrier, there’s no guarantee that other provinces that benefit from the elimination of that barrier will respond in kind.

Houston’s legislation would require Nova Scotia to reciprocate action taken by any other province, offering a guarantee that a gesture of goodwill won’t go unmatched.

The proposed legislation could lead to a domino effect. Ontario, for example, might see the benefits of reciprocal trade with Nova Scotia and could choose to introduce similar legislation to facilitate more reciprocal trade with other provinces.

By having politicians commit to matching each other’s moves toward freer trade, they don’t have to take a leap of faith when they stand up to special interest groups and tear down trade barriers.

Houston’s move comes at a critical time. Trump is threatening to introduce punishing across-the-board tariffs as soon as next week. Canada needs to be doing everything possible to strengthen the domestic economy to head off the impact of those tariffs.

Exports represent more than one-third of Canada’s GDP and 77% of Canada’s exports go to the United States. It’s hard to overstate just how devastating U.S. tariffs would be on Canada’s economy.

That’s why strengthening internal trade, in concert with growing Canada’s exports to markets other than the United States, will be crucial in the months ahead.

But unlike trading with other countries, where complex bilateral agreements must be negotiated, internal trade barriers in Canada could be eliminated tomorrow. All that’s been missing is the will to make it happen.

Houston is showing that eliminating internal trade barriers can be done swiftly. With a single piece of legislation, Houston is laying the groundwork for eliminating Nova Scotia’s trade barriers with other provinces, so long as they do the same.

Provincial governments across the country should follow Houston’s lead, introduce reciprocal domestic trade legislation, and unleash the true potential of Canada’s domestic economy.

Interprovincial trade barriers are holding Canada back at a time when we can least afford it. Canada’s premiers should embrace Houston’s plan to fix it.

Originally published here