Donald Trump displaying a signed executive order in the Oval Office on January 23/AP

By Colin Robertson

January 27, 2025

A week into Trump 2.0 and Donald Trump already has Canada in an uproar. Getting out of this mess is going to take effort by all levels of government.

It should start with removing our internal trade barriers. With Parliament prorogued and a lame-duck Trudeau government, the premiers are standing up to meet the Trump challenges.

The premiers have work to do, not just in making the case for Canada with their gubernatorial and state legislator counterparts, but in getting our own house in order. Meeting as the Council of the Federation, and with the prime minister, they’ve reached consensus on a path forward that includes retaliatory tariffs.

That the decision was not unanimous should be no surprise to those familiar with our purposely decentralized and flexible federation.

This time, the dissenting premier is Alberta’s Danielle Smith, who prefers to put the emphasis on more diplomacy. Smith, whose overtures to Trump have been criticized by some as too conciliatory, is naturally reluctant to put oil and gas on the table. It is Canada’s biggest single export to the U.S. and comes mostly from Alberta.

For his part, Premier Doug Ford has unveiled a ‘Fortress AM-CAN’ strategy that starts with strategic resource development, including Ontario’s critical minerals in the Ring of Fire region. Ford has appeared on Fox News, CNN and other U.S. outlets. Ontario has also produced a commercial arguing that we are ‘stronger together’ that was broadcast to the 100 million viewers of Monday night football. This is playing the game by American rules, and we need to do more of it.

From February 20-22, Ford, Smith and other premiers will participate in the National Governors Association meeting in Washington. Collectively, they will make the case for our mutually beneficial trading relationship, reminding their counterparts that the U.S. sells more goods and services to Canada than it sells to China, Japan, and Germany combined. Premiers’ interventions with the governors over successive “Buy American” U.S. legislative provisions in recent years have helped secure crucial exemptions for Canada.

Going forward, we need to pursue trade diversification while putting our own house in order. With their constitutional responsibility for resources and shared responsibility for trade and immigration, the provinces need to focus their energies on three baskets:

First and most important, there are our internal trade barriers: the unfinished business of Confederation and a perennial subject for parliamentarians and think tanks. The International Monetary Fund concluded they constitute a 25% tariff on Canadians. Recently appointed Internal Trade Minister Anita Anand says lifting barriers “could lower prices by up to 15%, boost productivity by up to 7% and add up to $200 billion to the domestic economy.” At a minimum, premiers should commit to joining the New West Partnership Trade Agreement that western premiers created and developed beginning in 2010 to increase labour mobility, streamline regulation and open procurement.

Colin Robertson’s Global Exchange podcast episode Dealing with Trump 2.0, with Perrin Beatty, Meredith Lilly and Gary Mar

By working together to improve our competitiveness, the provinces must also look at how we can better get our goods and services to markets including via the creation of a true national grid and pipeline system and upgrading our rail, road, air and ports to meet increased agri-food and resource production.

Second, as governments embrace industrial policies to create growth and employment, they need to make an equal commitment to regulatory reforms that will increase productivity and competitiveness. Because they are closer to the daily life of industry, provincial governments have always been better at working with business and labour.

This tripartite coalition needs to work in tandem on the application of new technologies, especially AI, in which Canada has advantages. They also need to be involved in the redesign of learning institutions to ensure their educating and training match the needs of industry.

Third, the provinces need to embrace trade diversification by increasing their commercial outreach through more provincial trade missions and placing more agents abroad. In my experience, the provincial trade representatives are usually the best informed on their local situation, complementing the national perspective provided by our Trade Commissioner Service.

Quebec has nine offices in the U.S. and they are effective in facilitating trade and investment and in identifying talent.  Saskatchewan Trade and Economic Partnership (STEP) is best in class and other provinces should look to it as a model for their own trade and investment promotion. At least for the next four years, our relationship with the U.S. is going to be difficult. President Trump’s tariff threat underlines our trade dependence on the United States: it takes 75% of our exports and provides us with 60% of our imports.

For now, Trump is riding high. Armed, thanks to the Supreme Court, with broader presidential immunities, he flouts norms and rules even more cavalierly than he did during his first term. He has begun taking revenge and retribution on his enemies. Confident in his base, including the freshly pardoned January 6 insurgents, Trump enjoys the almost absolute obedience of the Republican party leadership. He has now begun purging the civil service of dissidents.

While American democracy survived one term with Trump, can it survive a second thrashing? And what does this mean for Canada?

After nearly a century of increasing partnership with the U.S. we need to rethink our reliance on America for our economic prosperity and, if Trump’s continued musings about manifest destiny are to be believed, our national security as well.

Answering existential questions such as “How best do we defend our sovereignty?” and “How do we diversify our trade?” should be core considerations in the Liberal leadership campaign and for all parties in the coming election.

Meanwhile, we have much work at home to put our house in order and it starts with action by the premiers and provincial governments.

Contributing Writer Colin Robertson, a former career diplomat, is a fellow and host of the Global Exchange podcast with the Canadian Global Affairs Institute in Ottawa.