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.

From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

This negative perception of Canada’s regulatory environment is hardly a surprise, given Ottawa’s policies over the last decade.

During last night’s Liberal leadership debate, there was a lot of talk about Donald Trump. But whatever your views on President Trump, one thing is certain—he’s revitalized his country’s energy sector. Through a set of executive orders, Trump instructed agency heads to identify “actions that impose an undue burden on the identification, development, or use of domestic energy source” and “exercise any lawful emergency authorities available” to facilitate energy production and transportation. In other words, let’s become an energy superpower.

Clearly, to avoid falling further behind, Canada must swiftly end policies that unduly restrict oil and gas production and discourage investment. Change can’t come soon enough.

Before Trump’s inauguration, red tape was already hindering Canada’s oil and gas sector, which was less attractive for investment compared to the United States. According to a survey conducted in 2023, , 68 per cent of oil and gas investors said uncertainty about environmental regulations deterred investment in Canada’s oil and gas sector compared to 41 per cent in the U.S. Similarly, 54 per cent said Canada’s regulatory duplication and inconsistencies deterred investment compared to only 34 per cent for the U.S. And 55 per cent of respondents said that uncertainty regarding the enforcement of existing regulations in Canada deterred investment compared to only 37 per cent of respondents for the U.S.

This negative perception of Canada’s regulatory environment is hardly a surprise, given Ottawa’s policies over the last decade. For example, one year after taking office, in 2016 the Trudeau government cancelled the previously approved $7.9 billion Northern Gateway pipeline, which was designed to transport crude oil from Alberta to British Columbia’s coast, expanding Canada’s access to Asian markets.

In 2017, Prime Minister Trudeau undermined the long-term confidence in the sector by vowing to “phase out” fossil fuels in Canada.

In 2019, the Trudeau government passed Bill C-69, introducing subjective criteria including the “gender implications” of energy investment into the evaluation process of major energy projects, causing massive uncertainty around the development of new projects.

Also that year, the government enacted Bill C-48, which bans large oil tankers from B.C.’s northern coast, limiting Canadian exports to Asia.

In 2023, the Trudeau government announced plans to cap greenhouse gas (GHG) emissions from the oil and gas sector at 35 per cent below 2019 levels by 2030—an arbitrary measure considering GHG emissions from other sectors in the economy were left untouched. According to a recent report, to comply with the cap, Canadian firms must severely curtail oil and gas production. As one might expect, these policies come at a cost. Over the last decade, investment in Canada’s oil and gas sector has collapsed by 56 per cent, from $84.0 billion in 2014 to $37.2 billion in 2023 (inflation adjusted). Less investment means less funding for new energy projects, technologies and infrastructure, and fewer job opportunities and economic opportunities for Canadians nationwide.

The energy gap between the U.S. and Canada is set to grow wider during President Trump’s second term. While Trump wants to attract investment to the American oil and gas industry by streamlining processes and cutting costs, Canada is driving investment away with costly and often arbitrary measures. If Ottawa continues on its current path, Canada’s leading industry—and its largest source of exports—will lose more ground to the U.S. When Parliament reconvenes, policymakers must move quickly to eliminate harmful policies hindering our energy sector.

Julio Mejía

Policy Analyst

Elmira Aliakbari

Director, Natural Resource Studies, Fraser Institute