Last week was important for the relationship between Canada and the United States of America, highlighting areas of alignment and disagreement. However, we must start by addressing the assassination attempt on former President Trump by a shooter on July 13th, 2024, which rightly rattled much of the world, including Canada.
On both sides of the border, it was reassuring to hear from elected leaders of all political stripes, reaffirming our belief in democracy and rejecting political violence. They emphasized that we settle differences peacefully at the ballot box. I welcomed the statements by Canada’s political leaders, showing solidarity with our American neighbors, expressing relief that the assassination attempt failed, offering thoughts and prayers for the former President’s health, and extending condolences to the victims and their families. At times like these, we must stand together.
Seeing these statements of solidarity reminded me of being part of a 2017 all-party Parliamentary delegation in Washington, DC. We were there because Canada felt vulnerable about the upcoming NAFTA renegotiation and wanted to build allies within Congress. During one particularly memorable meeting, a busy Congressman who chaired a powerful committee took time to meet with us. He said he met with us solely to express his gratitude for Canada, especially the Canadian Armed Forces, for their work in Afghanistan.
He shared stories of Canadian and American troops working together under life-threatening conditions and the toll on those who served and their families. He saw Canada as the most important US ally, not just for our trade but because of our brave citizens who fought and died for our shared values of freedom and democracy. He noted our NAFTA concerns, thanked us again, and was whisked away by an aide.
As the NAFTA agreement eventually gave way to its successor, the Canada-United States-Mexico Agreement (CUSMA), I believe many in Congress and the Administration probably held views similar to Canada. We seemed to be mostly on the same page then, but now something has changed in our relationship. Canada is increasingly isolated. This year, trade between Mexico and the United States has eclipsed our trade with the USA.
Recently, Canada was put on notice by the United States Trade Representative, who is considering using “all tools at its disposal” under CUSMA regarding a new Digital Services Tax introduced by the Trudeau Government over the Canada Day long weekend. This new tax, which will bring in billions, is applied retroactively to 2022 and largely affects US firms. Professor Michael Geist has likened it to a high-stakes poker game: “Much like the bet that Meta was bluffing when it said it would block news links in response to legislation that amounted to a link tax, the Canadian government is once again gambling that the U.S. government threat is just a bluff.”
It’s not just trade concerns that are at issue. A group of US Senators from both parties wrote to the Prime Minister about Canada’s failure to meet the 2% of GDP target on military spending required by all members (we currently spend 1.37%). On Monday, it was reported that U.S. House of Representatives Speaker Mike Johnson criticized Canada for not meeting the North Atlantic Treaty Organization (NATO) target. He called it “shameful” and accused the government of “riding America’s coattails.”
Eventually, this led to an end-of-week announcement that the Government of Canada would reach the NATO 2% target for spending by 2032. Importantly, this new commitment has not been budgeted and is well beyond the lifespan of this Parliament. Given that the CUSMA will be up for review as early as July 1st, 2026, and that our current economic and military standing seems out of alignment with our longstanding friend, ally, and trading partner, these issues could haunt us in the upcoming review of CUSMA after the next American President takes office, regardless of their party.
My questions for you this week: are you confident that the Trudeau Government has well positioned our relationship with the United States of America? Why or why not?
I can be reached at [email protected] or toll free at 1 (800) 665-8711.
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