U.S. President Donald Trump, left, and Prime Minister Justin Trudeau arrive at a NATO leaders meeting Watford, U.K. on Dec. 4, 2019.Evan Vucci/The Associated Press
Edward Greenspon is the president and CEO of the Public Policy Forum and a former editor-in-chief of The Globe and Mail. Janice Gross Stein is the Belzberg Professor of Conflict Management and the founding director of the Munk School of Global Affairs & Public Policy at the University of Toronto. Drew Fagan is a professor at the Munk School and a former assistant deputy minister for foreign policy.
Take a deep breath, Canada. Focus on the opportunities, not on your worst fears.
Yes, on Jan. 20, 2025, Donald Trump will return to the White House. Yes, expect him once again to be willful, arbitrary and transactional. No, our goose is not cooked.
Kelly Craft, his former ambassador to Canada, told an Ottawa audience last month that Mr. Trump is going to get what he wants. “People need to buckle up and get ready,” she warned. It’s the wrong metaphor. Rather than being in reactive mode, as we were in the USMCA negotiations, Canada needs to take control of the steering wheel. We need to come forward with a plan that identifies where our national interests converge and where we can deepen the relationship, including trade but not just trade, for our mutual benefit.
“I think we’ve lost sight of the fact that we’re supposed to be partners, not just trading partners,” Gordon Giffin, a former Clinton administration ambassador to Canada, said in endorsing a more ambitious model of co-operation.
In the tradition of NORAD and the 1965 Auto Pact, Canada and the Trump-led United States have the opportunity to do big things together in the interests of our shared continent and as friends in a divided and dangerous world.
After a year of consultations with about 150 experts for the Public Policy Forum and Munk School of Global Affairs and Public Policy’s Matter More project, we are convinced Canada holds winning cards and now needs to focus on the most impactful ones. And, as Kirsten Hillman, Canada’s ambassador in Washington, has said, we should be playing our hand with the confidence of a country that has many of the answers to the problems that others face.
The geopolitical tensions rippling across the world are producing significant new opportunities for Canada. There is a new opening to take the lead on Arctic security. We are also the best alternative to China and Russia when it comes to potash, uranium, critical minerals and natural gas. Japan, for example, plans to use Canadian liquefied natural gas to replace the 9 per cent of its gas coming from Russia next year. And if nativist U.S. immigration policies bar the door to global talent, Canada is conveniently only a hop, skip and jump away.
AUKUS – the defence partnership between Australia, Britain and the U.S. – became a symbol to many of Canada’s fading relevance when we were excluded three years ago. The group now is seeking to deepen collaboration on advanced technologies, including AI.
Interestingly, the American Enterprise Institute, a conservative U.S. think tank, is promoting Canadian membership. Why? Because of Canada’s “world-leading expertise” in AI, counterhypersonic missiles and cyber; our vast deposits of such defence-related critical minerals as cobalt, nickel and vanadium; and our “access to and knowledge of the Arctic.”
The endorsement comes with a caveat, though. “Of course, for American conservatives, the success and appeal of all this depends very much on Canada’s willingness to finally get serious about its overall level of defense spending.”
In other words, we matter – but we need to matter more.
Everyone except Canadians seems to recognize that geopolitical circumstances have opened new doors. In the nearly three years since Russia’s invasion of Ukraine, Canada has become a popular destination for world leaders. Their messages have been consistent: Help us, your friends in the world, with energy security, critical minerals, defence, AI.
We have successes to celebrate. In 2022, Canada’s Cameco Inc. worked with Ukraine to convert the country’s nuclear plants away from Russian-enriched uranium. Little was said by our leaders about how Saskatchewan uranium kept the lights on there. Canadians might be interested to know that Cameco is the largest supplier of uranium to the United States and the world’s largest non-state-owned producer.
Donald Trump knows, as he demonstrated in his first term. While he imposed tariffs on Canadian aluminum and steel, he rejected a recommendation from his commerce secretary to do the same on uranium. Mr. Trump understood his country needed what Canada had to offer. It falls to us to put more such examples in the window.
We have amazing stories to tell. In Saskatchewan, BHP Billiton is building a mine that will turn out 20 times more potash than all U.S. sites combined. In Bromont, Que., IBM operates a semiconductor assembly and testing facility that has become part of a ”reshored” supply chain centred in New York State. Montreal-based CAE trains every U.S. Air Force aviation candidate on its flight simulators. MDA Space in Brampton, Ont., is the only non-American company allowed to operate a satellite tracking system with the United States Space Command. With 10 per cent of the world’s top-tier AI researchers, the second largest in the world, Canada is well-positioned to matter in the most important general-purpose technology of our age.
In energy, the U.S. gets 60 per cent of its oil imports from Canada, and judging from Mr. Trump’s continued support of the Keystone XL pipeline, this doesn’t displease the president-elect. Canadian companies control two of the world’s leading nuclear technologies (Candu and Westinghouse), and Ontario Power Generation is pressing ahead with one of North America’s first small modular reactors.
The most immediate threat Donald Trump poses to Canada is his determination to enact indiscriminate, across-the-board tariffs of 10 per cent to 20 per cent on imports. After that, we will have to contend with a review of the Canada-United States-Mexico Agreement (CUSMA) scheduled for 2026.
Mr. Trump, as his aides will remind you, loves two things above all: tariffs and negotiating. Canada’s task now is to shift his attention from the former to the latter through a select collection of sectoral and security pacts. Some might consider bargaining with a Trump-led United States to be ill-timed at best, immoral at worst. But the classic counterbalancing options – a massive sales push to China and India, or rapidly growing Canada’s population – are simply not on the table.
Others argue, with some reason, that pro-actively entering into smaller negotiations is dangerous with a winner-take-all mindset like Mr. Trump’s. But it certainly is no more perilous than waiting for the hammer to fall unilaterally. “If we sit back and wait for it, then I think we will get hit pretty hard and won’t have much of an avenue to win,” Steve Verheul, Canada’s top negotiator on CUSMA, said on a recent episode of the WONK podcast.
Canada’s best approach, given Mr. Trump’s incomprehension of the concept of a win-win, is to quickly forge relationships with the new team, right up to the president, and move forward with a set of strategic proposals that transcend transactional bargaining. The focus should be on doing things together in areas where we can clearly help them, and sometimes where only we can help.
What we imagine is far more ambitious than a trade agreement, while also laying a solid foundation for CUSMA negotiations. In keeping with geopolitical pressures, it combines security, economy and technology and “continentalizes” (co-investment, co-procurement, co-production) a limited number of joint activities.
Our modern “Auto Pact 2.0” includes Arctic security, critical minerals, energy and advanced technologies.
Arctic security
The United States is increasingly attentive to the security of the North but is stretched thin elsewhere. By increasing our spending in our Arctic, we help other Arctic powers also in the alliance. That is why NATO has offered to count our defence spending in the region as part of our contribution to NATO and toward the 2-per-cent target. Mr. Giffin believes it would play well “if some of the policy thinkers in Washington could go to bed at night and say, ‘The Canadians have that.’ ”
Critical minerals
Critical minerals are the closest thing Canada has to the type of bargaining chip crude oil represented in the original 1989 free trade agreement. China controls 87 per cent of the processing of the minerals essential to both the energy transition and modern defence systems. That stranglehold poses a serious strategic problem for the United States and its friends. Canada is as well-positioned as anyone to loosen the grip – if, that is, we can actually finance, extract, develop and process our critical minerals. We have already co-invested with the U.S. Defense Production Act Investment Office in three smaller projects. Building on those partnerships would serve as our best force multiplier with the Trump White House. In exchange for supply guarantees, Canada will need its allies to participate in financing such a large and risky undertaking.
Energy and environment
While Republicans are unmoved by the climate crisis, they are fixated on energy security and affordability. They worry about the vulnerability of their electricity grid and their access to uranium. At the same time, Canadian crude helps keep down politically sensitive gasoline prices and we are constantly moving natural gas along north-south corridors. This might be the sector most easily exempted from tariffs.
Advanced technology
Technology has always been a key determinant in the strategic positioning of countries; as much as anything, control over supply chains and international standards are at the core of the U.S.-China rivalry. It is all hands on deck as the U.S. seeks to reshore production – and Canada has helpful hands, particularly on AI research, space surveillance and semiconductor packaging. Restrictive U.S. immigration policies would position us well as a locale for talent.
On the campaign trail, Mr. Trump waxed poetic about tariffs being “the most beautiful word in the dictionary.” His affection for them has been a consistent theme of his public life. He hopes a combination of tariffs on foreign goods and lower taxes on U.S. corporations will draw more manufacturers back to the United States. He’s unlikely to face much pushback from Congress or the public, for whom tariffs are also popular.
The best Canada can do to deter him is to pursue a strategy that confers even more significant wins – such as guaranteed access to critical minerals and a faster move to NATO’s 2-per-cent defence-spending target.
With the election behind us, Canada’s main mission now lies in marshalling our confidence to make bold policy decisions at home that enable us to become a more valuable “friend” to our biggest partner and the other friends we have in common. No one else has as much of what they need as we do.
So take another deep breath, Canada. It’s game on, and we possess the assets to matter more to the United States.