No one should be surprised that Canada did not achieve a trade deal with a Trump-led U.S. administration. The Carney Liberal government gained its popularity on an “elbows up” campaign against Trump and their political playbook relies on it. So long as Canadians still believe this rhetoric, Prime Minister Mark Carney has no reason to put down his elbows and shake Trump’s hand.
The Liaison Strategies Weekly Federal Tracker released Aug. 31 proves what’s economically bad for Canada can be politically good for the Liberals. The telephoned survey shows the Liberals enjoy 46 per cent support, followed by the Conservatives with 29 per cent. That latter figure is the lowest the Conservatives have ever scored for Liason.
This was perfect timing for three by-elections scheduled for Aug. 31. Despite not reaching a deal with Trump and presiding over a recession amidst deficit spending that has no foreseeable end, Carney has somehow come out the big winner from a Canada that keeps on losing.
The prime minister’s approval rating moved up 5 points to 64 per cent, and his disapproval down four points to 27 per cent. Carney’s approval is strongest in Quebec at 80 per cent, though 62 per cent of Ontarians also approve. Meanwhile, Poilievre polled 33 per cent favourable and 55 per cent unfavourable, his worst showing since January.
Why might Carney’s approval rating be highest in Quebec? Probably because that province’s wants had more to do with scuttling this trade deal than President Donald Trump did. The two sides were quite close to a deal 24 hours before they parted, but could never bridge the distance, thanks to Quebec’s interests.
Thanks to Trump’s insistence in 2018, the Canada-U.S.-Mexico Agreement (CUSMA) gained the U.S. access to 3.59 per cent access to Canadian dairy. However, the actual U.S. utilization of this quota has only been 1.7 per cent. To fill the difference, the U.S. wanted retailers such as Walmart to have direct access to CUSMA quotas, not just processors and distributors. Canada wouldn’t do it.
Canada’s refusal had Quebec breathing a sigh of relief. The province produces 37 per cent of Canada’s milk, has 36 per cent of the nation’s dairy cows, and more than 46 per cent of Canada’s dairy farms. This supply management system increases costs for consumers and leads to a lot of milk getting dumped. Even though Quebec has only about 4,500 dairy farmers, protecting them has somehow become politically sacred.
Another sticking point was aluminum. President Donald Trump announced 25 per cent tariffs on Canada on March 12, which led to Canadian retaliation of 25 per cent tariffs on $29.8 billion of U.S. goods, including steel and aluminum. As a result, Trump slapped 50 per cent taxes on Canadian steel and aluminum.
Quebec just couldn’t have that. Canada has 10 primary aluminum shelters and nine of them are in Quebec, a province that also has an alumina refinery. Apparently during negotiations, the U.S. and Canada were close to lowering these tariffs, with the U.S. being willing to drop theirs to 25 per cent. However, the U.S. apparently also sought preferential access to Canadian metals. Altogether, the two sides just couldn’t agree.
The U.S. also objected to aspects of Canada’s Online Streaming Act, a piece of legislation that required that Netflix and similar platforms recommend and display Canadian programs more prominently in Canada. This is a much touchier issue in Quebec which wanted to promote French-language Canadian content and French language titles of movies on people’s screens. Again, this is an issue that Canadians outside of Quebec barely care about.
Another contentious issue was that the U.S. wanted Canada to stop making new trade deals with China. Carney called this regime Canada’s greatest geopolitical threat during the general election campaign yet announced a strategic partnership with the country last January. After negotiations failed, Carney wrapped up this decision in the Canadian flag, saying that the U.S. could not allow U.S. infringement on its sovereignty and external trade decisions.
Nothing on this list is a hill for Canada to die on, yet that’s just what Canada did. That’s because in a political sense, fighting Trump is the hill to live on, one that becomes inaccessible once the U.S. and Canada return to good terms. So long as the nations are at odds, Carney can blame Trump for all of Canada’s economic woes and portray himself as the great Canadian hero. So long as Canadians believe that narrative, a deal with Trump is unlikely.
