“Team Canada”: Takeaways from Canada-U.S. Economic Summit

Torys’ Canadian and New York offices will be providing regular briefs on the legal ramifications of the tariffs and other cross-border policy developments on the horizon.

At today’s Canada-U.S. Economic Summit, several important messages and priorities became clear as Canada looks to respond to current tensions related to tariffs and trade between Canada and the United States. It is a watershed moment for business and industry, now charged with an urgent imperative to stand in concert to strengthen Canada’s economy for the future.

The Prime Minister framed the Summit around tactics to address the short-term threat of tariffs (with a goal of avoiding any imposition of tariffs, or if tariffs are imposed, removing them as soon as possible) and strategy to build resilience and fortify Canada’s economy for the long term. Below are our observations and takeaways from this event which was rich with both ideas and passion. The government was represented by the Prime Minister and Ministers Anand, Champagne and MacKinnon.

• U.S. relations. While we may see prolonged uncertainty surrounding Canada’s relationship with the United States, in the long term they will always remain a key trading partner and ally. The renegotiation of CUSMA will allow the parties to recalibrate in a number of key areas. The Prime Minister argued Canada should maintain the tri-lateral framework for negotiations and resist any instinct to do a U.S.-Canada deal.
• International relations. Canada must maintain and grow its trade relationships with partners like Mexico and Europe and double-down on efforts immediately to increase trade across international markets. Canada has trade agreements with nearly two-thirds of the world’s economy; we should ensure we are leveraging these agreements effectively¹.

The Summit convened an experienced and broad group of Canadians from almost every sector and stakeholder group in the country. In an effort to create momentum and build consensus across stakeholders, the Summit identified the following key action items:

• reduce interprovincial trade barriers with utmost urgency. The goal is to make a once-in-a-generation reduction in non-tariff barriers quickly;
• reduce overall regulatory barriers and uncertainty to promote a stable business and investment environment;
• revisit permitting regimes to lighten the regulatory burden and increase the speed of project development. Focus on building both critical economic infrastructure, including pipelines, as well as “nation-building” infrastructure, more quickly and efficiently;
• work with industry sectors to secure resilient supply chains and more integrated manufacturing;
• support Canadian procurement practices as well as diversify international procurement partnerships. Ensure increased defence spending includes a strong focus on Canadian manufacturing and technology;
• mobilize Canadian industry to advance our strengths in order to, among other things:
  • accelerate Canada’s critical minerals strategy and drive forward development of this key national asset; and
  • expedite the development of nuclear power in lockstep with advancing Canadian uranium mining.
• prioritize the involvement of and partnering with Indigenous communities to advance Canada’s overall economic agenda. Make reconciliation a competitive advantage with Canada as a leader in relations with Indigenous peoples, and encourage full partnership with Indigenous peoples in our sustainable growth agenda; and
• support workers and small businesses through any transitions and toward growth and future development—though any such support would be unlike the government’s response during the pandemic. The support is likely to be more focused and involve a lower fiscal commitment by government than during the pandemic.

Government policy will aim to ensure no one part of the country or industry bears a disproportionate burden as Canada responds to any tariffs that are imposed.

Overall, the Summit’s key objective was to bring Canadian leaders together in common cause to strengthen Canada. The call is for all stakeholders to “step up” in their spheres of influence, act quickly on key generational issues and opportunities, and cultivate a strong and resilient economy that can withstand challenges like the one Canada is facing with its key trading partner. For stakeholders at the Summit, this mandate was met with a strong reception marked by determination and unity.

It appears that a window for industry, business and labour is opening through which Canada can seize upon this renewed sense of urgency and advance bold initiatives to expand and fortify the Canadian economy and increase productivity and growth. As various participants argued, Canadians didn’t seek this challenge from the U.S. administration, but we can turn it from challenge to opportunity.

 
Read more Tariffs and trade briefs.