From the Fraser Institute

By Ross McKitrick

During the Superbowl, Doug Ford ran a campaign ad about fearlessly protecting Ontario workers against Trump. I suppose it’s effective as election theatre; it’s intended to make Ontarians feel lucky we’ve got a tough leader like Ford standing up to the Bad Orange Man. But my reaction was that Ford is lucky to have the Bad Orange Man creating a distraction so he doesn’t have to talk about Ontario’s high taxes, declining investment, stagnant real wages, lengthening health-care wait times and all the other problems that have gotten worse on his watch.

President Trump’s obnoxious and erratic rhetoric also seems to have put his own advisors on the defensive. Peter Navarro, Kevin Hassett and Howard Lutnick have taken pains to clarify that what we are dealing with is a “drug war not a trade war.” This is confusing since many sources say that Canada is responsible for less than one per cent of fentanyl entering the United States. But if we are going to de-escalate matters and resolve the dispute, we should start by trying to understand why they think we’re the problem.

Suppose in 2024 Trump and his team had asked for a Homeland Security briefing on fentanyl. What would they have learned? They already knew about Mexico. But they would also have learned that while Canada doesn’t rival Mexico for the volume of pills being sent into the U.S., we have become a transnational money laundering hub that keeps the Chinese and Mexican drug cartels in business. And we have ignored previous U.S. demands to deal with the problem.

Over a decade ago, Vancouver-based investigative journalist Sam Cooper unearthed shocking details of how Asian drug cartels backed by the Chinese Communist Party turned British Columbia’s casinos into billion-dollar money laundering operations, then scaled up from there through illicit real estate schemes in Vancouver and Toronto. This eventually triggered the 2022 Cullen Commission, which concluded, bluntly, that a massive amount of drug money was being laundered in B.C., that “the federal anti–money laundering [AML] regime is not effective,” that the RCMP had shut down what little AML capacity it had in 2012 just as the problem was exploding in scale, and that government officials have long known about the problem but ignored it.

In 2023 the Biden State Department under Anthony Blinken told Canada our fentanyl and money laundering control efforts were inadequate. Since then Canada’s border security forces have been shown to be so compromised and corrupt that U.S. intelligence agencies sidelined us and stopped sharing information. The corruption went to the top. A year ago Cameron Ortis, the former head of domestic intelligence at the RCMP, was sentenced to 14 years in prison after being convicted of selling top secret U.S. intelligence to money launderers tied to drugs and terrorism to help them avoid capture.

In September 2024 the Biden Justice Department hit the Toronto-Dominion Bank with a $3 billion fine for facilitating $670 million in money laundering for groups tied to transnational drug trafficking and terrorism. Then-attorney general Merrick Garland said “TD Bank created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one.”

Imagine the outcry if Trump had called one of our chartered banks a criminal organization.

We are making some progress in cleaning up the mess, but in the process learning that we are now a major fentanyl manufacturer. In October the RCMP raided massive fentanyl factories in B.C. and Alberta. Unfortunately there remain many gaps in our enforcement capabilities. For instance, the RCMP, which is responsible for border patrols between ports of entry, has admitted it has no airborne surveillance operations after 4 p.m. on weekdays or on weekends.

The fact that the prime minister’s promise of a new $1.3-billion border security and anti-drug plan convinced Trump to suspend the tariff threat indicates that the fentanyl angle wasn’t entirely a pretext. And we should have done these things sooner, even if Trump hadn’t made it an issue. We can only hope Ottawa now follows through on its promises. I fear, though, that if Ford’s Captain Canada act proves a hit with voters, the Liberals may distract voters with a flag-waving campaign against the Bad Orange Man rather than confront the deep economic problems we have imposed on ourselves.

A trade dispute appears inevitable now that Trump has signaled the 25 percent tariffs are back on. The problem is knowing whom to listen to since Trump is openly contradicting his own economic team. Trump’s top trade advisor, Peter Navarro, has written that the U.S. needs to pursue “reciprocity,” which he defines as other countries not charging tariffs on U.S. imports any higher than the U.S. charges. In the Americans’ view, U.S. trade barriers are very low and everyone else’s should be, too—a stance completely at odds with Trump’s most recent moves.

Whichever way this plays out Canada has no choice but to go all-in on lowering the cost of doing business here, especially in trade-exposed sectors such as steel, autos, manufacturing and technology. That starts with cutting taxes including carbon-pricing and rolling back our costly net-zero anti-energy regulatory regime. In the coming election campaign, that’s the agenda we need to see spelled out.

How much easier it will be instead for Canadian politicians to play the populist hero with vague anti-Trump posturing. But that would be poor substitute for a long overdue pro-Canadian economic growth agenda.

MxM News

Quick Hit:

France is reportedly prepared to extend its nuclear deterrent to protect Europe, as concerns grow over U.S. commitment to NATO under the Trump administration. Fighter jets carrying nuclear weapons could be stationed in Germany, marking a major shift in European defense policy.

Key Details:

• French nuclear-capable fighter jets could be deployed to Germany as the U.S. considers reducing its military presence in Europe.
• German Chancellor-elect Friedrich Merz has urged Britain and France to extend nuclear protection to Europe as he seeks to reduce dependence on the U.S.
• Emmanuel Macron discussed his European security strategy with Donald Trump at the White House, emphasizing that peace in Ukraine must not mean surrender.

Diving Deeper:

France is poised to extend its nuclear deterrent to help protect Europe, with potential plans to station nuclear-capable fighter jets in Germany. The move comes amid growing uncertainty over U.S. military commitments on the continent.

Friedrich Merz, who won Germany’s recent elections and is expected to become chancellor, has been vocal about securing European “independence” from American security guarantees. Merz has called on France and Britain to expand their nuclear umbrella to Germany, arguing that Europe can no longer rely on Washington’s protection.

A French official told The Telegraph that deploying nuclear jets in Germany would send a strong message to Russia, while Berlin-based diplomats suggested that such a move could pressure British Prime Minister Sir Keir Starmer to take similar action. “Posting a few French nuclear jet fighters in Germany should not be difficult and would send a strong message,” the official said.

Macron, a longtime advocate for European strategic autonomy, discussed the nuclear defense initiative with Merz on Sunday night before traveling to Washington. At the White House, he presented his vision for Europe’s security and the defense of Ukraine to President Trump. During a joint press conference, Trump indicated that the U.S. would not offer security guarantees to Ukraine once a peace agreement was signed.

Macron, standing beside Trump, emphasized that any peace settlement “must not be a surrender of Ukraine” and called on European nations to take greater responsibility for the continent’s security.

For decades, the U.S. has maintained Europe’s security with a nuclear arsenal of roughly 100 missiles, many of which are based in Germany. However, France’s nuclear program operates independently from NATO, while Britain’s serves as a core component of the alliance’s defense strategy. Merz has urged both nations to consider expanding their nuclear security umbrella to include Germany.

On Monday, former British Prime Minister Boris Johnson added to the debate, arguing that Ukraine itself should have nuclear weapons as a deterrent against future Russian aggression. Speaking to The Telegraph during a visit to Kyiv, Johnson said there was a “moral case” for Ukraine to develop its own nuclear arsenal.

Although talks on a formal European nuclear deterrent have yet to begin, Germany’s diplomatic circles acknowledge the growing pressure on Berlin to consider France’s offer. Macron has long pushed for a European dialogue on the role of France’s nuclear weapons in defending the continent. A Berlin diplomat suggested that Macron’s push would also challenge Starmer to clarify Britain’s role in European defense.