Different Approaches to US/Canada Relations

I, like many, watched Mark Carney's speech in Davos. I am not going to address the specifics of his speech but I am going to attempt to put it into a broader context.

Many believe that it was just a rebuke of Donald Trump, which it certainly was, but it was much more than that. It was a very articulate and rather extreme expression of one of the two approaches that have dominated Canada's relations with the United States for decades.

The first approach is the one PM Carney expressed rather forcefully. That is, the United States is our neighbour and our friend but they are so large there is an ever present threat that they will swallow Canada just by its very existence. Therefore, there needs to be a constant effort to push back on that to maintain our sovereignty and our distinctiveness.

The second approach is to be somewhat more subordinate to the United States. They are the dominant country on the planet, financially, militarily and culturally, so trying to fight that is futile and besides making us more like them can only be beneficial to Canada and its people.

Of course, that is a simplification of the complex interplay between the two approaches. No government has ever chosen to follow one approach over the other but all governments have chosen to give one more weight in their dealings with the US.

The Liberals tend to choose the first approach. Think of PM Pierre Trudeau and his much more conciliatory approach to relations with the Soviet Union and Communist China of the 1970s and 80s. Think of Jean Chretien telling George W. Bush that Canada would not participate in the second invasion of Iraq in 2003. 

The Conservatives tend to favour the second approach. Think of the Diefenbaker government giving into pressure from the Kennedy Administration to scrap the Avro Arrow and buy the Bomarc Missiles, missiles that were obsolete before we bought them. Think of the Canada/US Free Trade Agreement or think of the trial balloons, from both Brian Mulroney and Stephen Harper, of adopting a common currency with the US. Only to see both never to mention that idea again when those balloons were shot down by Canadians with extreme prejudice.

Again, that is not to say they exclusively follow these approaches. The Chretien government negotiated the NAFTA and sent troops to Afghanistan after 9/11. The Mulroney government took the lead in negotiating the treaty that banned CFCs and they took the lead in the efforts to bring down Apartheid in South Africa, breaking with the Reagan Administration in both cases.

So Mark Carney's speech was just another example of the first approach and it was consistent with the Liberal's preferred approach to Canada/US relations. What was remarkable about it was how extreme of an example it was of that approach. As someone who has followed Canadian foreign policy for over four decades I was shocked by that speech, not because what he said was wrong but because I never believed a Canadian PM would articulate such a position in public.

Then again, Donald Trump, and his actions towards Canada, has created the conditions where the Canadian government would have to go to extremes to defend our sovereignty. The corollary to that is if we were being governed by the Conservatives they would probably have to go to extremes in their preferred approach.

That prospect scares the hell out of me as I have always preferred the first approach. This is not a partisan dig at the Conservatives by the way. I have always appreciated that governments of every stripe have balanced the two approaches in such a way that we have had decades of peace and prosperity with our southern neighbours. I have often disagreed with specific policies and decisions but overall I have been satisfied with how governments have handled the Canada/US relations.

Unfortunately, Donald Trump has eliminated the balanced approach as an option. He demands complete subordination from Canada, either as the 51st or a vassal state so we are left with having to choose a single approach. Therefore we either have to push back on that hard, as PM Carney is doing, or we have to give in to his demands. I am glad that PM Carney has chosen the approach he has chosen.

Well the Canadian Auto Industry Is Not Up to the Task

In a previous post I asked if the Canadian business class was up to the task of taking advantage of all of the new opportunities being presented by Mark Carney's efforts to expand and diversify markets for Canadian goods and services. I expressed doubt they would be and it would appear I am correct with regard to the Canadian auto industry.

My reasoning is they are beginning to make noise about having the government eliminate or at least delay the requirement to eliminate the sales of gas powered cars by 2035. That requirement has been in the books for over a decade and the Trudeau government gave the industry a couple of decades to meet it.

Those calls have become a little more louder with the Americans eliminating a large number of green house gas emissions requirements in the US, including measures that impact the US auto industry.

The reasoning I have heard is that with the US eliminating the requirement Canada no longer needs them and that pretty much sums up my distain for the Canadian business class.

As usual, they are falling on the old habit of depending on the US market for their business even though the actions of the Trump Administration is disintegrating the North American auto industry. They just cannot help themselves. The evidence is mounting, almost daily, that the US market is no longer a reliable one and will become increasingly unreliable as time goes on. As well, even if Donald Trump were to drop dead today it would not change much because his ideas about tariffs have been embraced by MAGA and will not go away quietly even after he is gone.

Therefore, if the Canadian auto industry wants to continue to be a viable industry they are going to have to expand their access to markets in Europe and Asia. The problem is those countries are toughening environmental requirements, not loosening them. So if the Canadian auto industry fails to meet those requirements they will not be able to sell their cars in those markets. They will be frozen out on environmental grounds. To be clear these will not be tariffs they will be bans on Canadian made automobiles on environmental grounds, i.e. no sales at all.

So the Canadian auto sector should be looking to accelerate their efforts to replace the sale of gas powered cars, not asking the government to loosen requirements. 

It is almost a state of nature that governments trail behind private businesses. There are many examples of that. However, we are seeing an exception. The Canadian government has embarked on a quest to completely change who Canadians can sell their goods and services to and our industry appears to be oblivious to this, falling back onto old but increasingly nonviable habits. 

It is both sad and infuriating.

Polls and Election Speculation

Liberals are celebrating great polling recently and some are speculating that we will be having a spring election.

Some will remember that when the CPC were 20 points up on the Liberals that I expressed profound doubt in the veracity of the polls because there was no election speculation to go along with the lead. After all, when a minority government, with less seats than the current minority government, goes 18 months without an election despite being down by that much then the polls were obviously untrue. It's true that Pierre Poilievre has no political acumen but even he would have finally figured out how to take advantage of great polling, given the amount of time he had to do so, if the polls were right. They were not and the fact the polling gap was closing before the election of Donald Trump, the resignation of PM Trudeau and the election of Mark Carney as Liberal leader pretty much proves that.

Which brings us to the great polling the Liberals are enjoying. The interesting thing is they are being accompanied by the media speculating about the Carney Liberals calling a snap election to take advantage of them. Does this mean we can assume the polls are correct this time? 

No.

Polls in between election campaigns are hopelessly unreliable. Hell they are only slightly more reliable during election campaigns but that is only because the polling companies use their polls as marketing tools so they have to be as close to the final election results as possible to maximize their effectiveness. So no campaign means the polls are garbage that can be safely ignored.

So why is the media speculating about an early election? 

First, because it sells. The media care about nothing more than clicks. It has been like that for quite some time. It is also why news media outlets are always skating near the edge of doom. No one wants to actually pay for that shit and they are increasingly acting on that lack of desire.

Second, the main stream media gave up actually informing consumers of their products on substantive issues a long time ago. And I mean before the internet became all pervasive. So if the media has to choose between election speculation and actually providing us real information about government programs and policies they will take speculation 100% of the time.

Third, the media does not have the best interests of the Liberal Party of Canada in mind. It has been like that since Jean Chretien was PM. They have been actively working to undermine the party since then and the election speculation is all about that. Right now Canadians are concerned about the orange blob who occupies the White House. They are also impressed with how Mark Carney is handling that situation. That is leading to his personal polling numbers being quite impressive and they are the only ones I actually believe, although they are probably overblown. The reason is I actually have conservative members of my family indicating they like him and what he is doing. These are the same relatives who never said a good thing about the Liberals for decades.

So something needs to be done to try to bring those numbers down. Telling Canadians that Mark Carney is planning on calling a snap election is one way to do that. No one wants an election and if the Liberals were to actually call one they would see their polling advantage evaporate very quickly. So a way to take advantage of that is to say the Liberals are planning to call a snap election, although not in so many words, which is why it is all speculation right now.

So my advice to you is to ignore it. It is all noise.

Is Canada's Business Class Up To The Task?

I have written in this space before that Canada is a first rate country with a fourth rate business class. Their way of making money is to establish branch plants for the big US multinationals and to pull stuff from the ground to sell as raw material. They rarely process that raw material into a value added product, being content to sell the raw material to another establishment, usually in the US, and buy back the finished product at a markup.

The actions of the US administration and the actions of the Carney government are putting big monkey wrenches into that approach to making money. The US is no longer reliable and even if Donald Trump were to drop dead tomorrow, it will not be reliable ever again. At the same time, Mark Carney is traveling around the world making trade and investment deals with anybody who is interested and judging by the number of deals he has announced it would appear that many are interested in what Canada has to offer.

So now our business class is going to have to step up. The government is creating the conditions for them to make money a different way than in the past. They just need to have the business acumen and courage to take advantage of them.

I am not holding my breath that they will. The old approach is too ingrained in our business class for them to change. However, they could surprise me.

We will have to wait and see.