From Conservative Party Communications

A new trading partner

Conservative Leader Pierre Poilievre released a video outlining his plan to massively increase internal trade in Canada, making us less reliant on trade with the United States and potentially boosting GDP by over $200 billion per year, or $5,100 per person.

Poilievre will:

• Within 30 days of becoming Prime Minister, bring together the Premiers to agree on removing as many exemptions as possible.
• Prioritize an agreement on one standard set of trucking rules to get billions of dollars of goods moving east-west instead of only going north-south. This move alone would boost GDP by $1.6 billion.
• Create a Blue Seal Professional Licensing Standard recognized in each province so doctors, nurses and engineers can work in all provinces and territories and those Canadians trained abroad can quickly get certified and working in Canada up to our standard.
• Offer provinces a Free Trade Bonus to get a deal done. Every trade barrier removed by provinces will generate more GDP, and more revenue. Poilievre plans to give this increased tax revenue back to provinces to spend on schools, hospitals, and whatever else Premiers choose. As this bonus would only be paid out of boosted government revenues from free trade, it would not add to the massive NDP-Liberal deficit.

“President Trump’s tariffs are a wake-up call to all political leaders, who are now forced to put the national interest ahead of special interests,” Poilievre says. “Canadians will expect all political leaders to do what it takes to make our country more self-reliant and less dependent on the Americans. It starts with trade at home.”

Trade barriers between Canadian provinces are more costly than trade barriers between Canada and other nations. The result is that we now trade more with the rest of the world than we do with ourselves: in 2023, international trade was worth 66% of GDP, while interprovincial trade was only worth 36%. That makes no sense.

To understand the problem, look no further than the Canada Free Trade Agreement which is supposed to allow commerce between provinces and territories. As the Globe and Mail put it: “It is noted more for the number of exemptions it allows than for the number of barriers it actually eliminates; of the deal’s 340 pages, 133 were needed to list those exemptions.” The Montreal Economic Institute in 2023 counted a total of 245 exemptions across all provinces and territories.

Economist Trevor Tombe estimated that eliminating all interprovincial trade barriers would boost Canada’s economy by as much as 7.9% and generate an economic boost of $200 billion per year, or $5,100 per person.

Free trade in Canada will not be enough to displace the U.S. market, but this move by Poilievre will help start bringing home more business, and make Canada less dependent on forces and countries outside of our control.

We must take back control of our lives and country. That means a Common Sense Conservative government that puts Canada First.

From the Fraser Institute

By John Ibbitson

Because we live in dangerous times, and because an honest country keeps its word, Canada should meet its NATO commitment to spend at least 2 per cent of GDP on defence. But there’s another reason to live up to that promise—it’s good for trade.

Countries that are able to defend themselves earn the respect of their allies. That respect can provide tangible benefits. Consider Cyprus and the Auto Pact.

In the winter of 1964, in the depths of the Cold War, violence between Greek and Turkish Cypriots threatened to escalate into war between Turkey and Greece. President Lyndon Johnson, anxious to prevent war between two NATO members, was hugely grateful when Prime Minister Lester Pearson agreed to dispatch a peacekeeping force to the island.

“You’ll never know what this may have prevented,” said Johnson. “Now what can I do for you?” As Pearson noted in his memoirs, “I had some credit in the bank.”

A year later, Canada and the United States signed the Auto Pact, which guaranteed minimum levels of production for the Canadian auto industry. “I believe that Johnson’s willingness to agree to the Auto Pact the next year, an agreement that hugely benefited Canada’s auto sector, may well have been Pearson’s reward for Cyprus,” wrote historian J.L. Granatstein years later.

Canada’s relations with its NATO allies cooled in the years when Pierre Trudeau was prime minister. Trudeau considered pulling out of NATO entirely, but in the end contented himself with greatly reducing Canada’s troop presence in Europe. But Trudeau began to show new respect for NATO when he sought to diversify Canada’s trading relationships. “No tanks, no trade,” West German Chancellor Helmut Schmidt reportedly told him. Trudeau subsequently boosted defence spending and Canada acquired German Leopard tanks.

In the 1980s, as Brian Mulroney sought to improve relations with the U.S., his government maintained  defence spending at or near 2 per cent of GDP, even as the government reduced spending in other areas to bring down a chronic deficit. On Mulroney’s watch, Canada retained a robust commitment to NATO and NORAD. In February 1990, former Cold War antagonists agreed to a process for German reunification during the Open Skies conference in Ottawa; six months later, Canada joined a U.S.-led coalition that ejected Iraqi forces from Kuwait.

And in the midst of this stalwart support, Canada and the U.S. negotiated their historic free trade agreement.

Then came the so-called Decade of Darkness, as Jean Chretien’s government cut funding to the military to help balance the budget. In the 2000s, Stephen Harper ensured that the Canadian mission in Afghanistan was properly equipped, but his government further cut spending in the wake of the 2008-09 financial crisis. By the time Justin Trudeau came to power, defence spending was at 1 per cent of GDP.

While it appears Justin Trudeau’s government increased defence spending, part of that is the  accounting trick of putting veterans’ benefits in the budget. In fact, Canada remains virtually the sole outlier among NATO members in having no credible plan to get to 2 per cent any time soon.

Last spring, 23 U.S. senators (both Democrat and Republican) issued a letter taking Canada to task for failing to meet its defence commitments. And they spoke plainly. “We are concerned and profoundly disappointed that Canada’s most recent projection indicated that it will not reach its two percent commitment this decade.”

In that sense, Donald Trump was speaking for everyone in Washington when, as president-elect, he told reporters that “we basically protect Canada… we’re spending hundreds of billions a year to take care of Canada.”

That doesn’t in any way excuse the punitive tariffs the administration imposed on Canada and Mexico over the weekend. Those economic sanctions are capricious, vindictive and mutually damaging. Canada had no choice to but to respond in kind.

But it’s also true that other countries no longer take this country seriously. During the Biden administration, the U.S., the United Kingdom and Australia entered into the AUKUS security pact. Canada wasn’t invited. And QUAD security dialogue involving Australia, India, Japan and the U.S. is not QUINT, because we weren’t asked to join.

Canada will have a new federal government within months. Its highest priority must be to restore free trade with the U.S. One way to negotiate seriously with the Trump administration may be to offer a specific concrete program of investment in the NORAD partnership, in exchange for the removal of tariffs.

If the Americans agree, it wouldn’t be the first time that trade and defence were intertwined.

John Ibbitson