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Conservative Party of Canada leader Pierre Poilievre; Mark Carney, former Governor of the Banks of England and Canada; and Canada's former Foreign Minister Chrystia Freeland.
Hot heads, cold comfort: How Trump is upending the race in Canada
There’s an old saying: “If you do not change direction, you may end up where you are heading.” With the changing of the guards in both the US and Canada, where are these two countries headed?
The short answer? They’re headed for a hot trade war, one made hotter by Donald Trump’s threats to take over Canada by escalating counter-threats from patriotic Canadian leaders who are locked in their own election cycle. The political barometer is rising.
This has upended conventional wisdom about the political landscape in Canada, where the Liberals are in a leadership race (former Banks of Canada and England Governor Mark Carney announced his leadership bid in Edmonton today), and a federal election is likely to kick off at the end of March.
Just weeks ago, it was all about Justin Trudeau and his legacy. The Conservatives, led by Pierre Poilievre, have been up in the polls, with a lead ranging from 20 to 25 points. That may well hold, but the election is no longer only about Trudeau. It is also about Trump’s threat to take over Canada and which leader has the best response.
Outside threats have a way of healing some internal divisions and, already, we’ve seen two long-time former prime ministers, Stephen Harper, a conservative, and Jean Chretien, a Liberal, speak out forcefully against Trump’s threat. That catalyzed all political leaders to boost their own tough patriotic talk aspolls show the vast majority of Canadians reject Trump’s expansionist dream.
A common outside threat doesn’t help an opposition party looking to focus on domestic issues, but it also creates new internal divisions.
For example, Ontario’s Premier Doug Ford believes Canada must retaliate against the US with every weapon possible, including cutting energy supplies, while Alberta Premier Danielle Smith says cutting off energy exports will spark a national unity crisis. She wants it off the table. Smith went to visit President-elect Trump in Mar-a-Lago to get an exemption for Alberta energy, where she was joined by the self-appointed champion of Trump’s Canadian union strategy, Kevin O’Leary.
Will Poilievre side with Smith on the energy issue, and if so, does that risk being linked to O’Leary, who openly supports an economic union between the US and Canada? Or, will a new Liberal leader side with Ford and drive the old East vs. West internal tensions at a time when unity is needed?
The Canadian federal election cycle and the Liberal leadership race are now being driven by three factors:
Change. The Economy. And Trump.
All of Canada’s leadership candidates are pitching themselves as a change from Trudeau, especially the Liberal contenders, which is a harder case to make than it is for Poilievre.
On Monday, Mark Carneysoft launched his campaign on “The Daily Show with Jon Stewart,” calling himself an “outsider” and talking about his long economic experience in dealing with serious disruptions like the 2008 financial collapse. (Disclosure: Carney is a close family friend, and Diana Fox-Carney is an adviser at Eurasia Group, our parent company). Former Finance Minister Chrystia Freeland is also expected to launch her bid, with reports saying she will try to position herself as a change candidate by scrapping the carbon tax, a policy she long championed that has become controversial.
So defining yourself as a change candidate is vital. When it comes to the economy, inflation and home prices are still crucial to the domestic agenda, but will these drop back as the impact of the Trump tariffs is felt? Expect the tariffs to dominate the economic agenda if they come next week.
Does changing the focus of the upcoming federal election to an outside threat change the current polls? That will be the most critical question in the next Canadian federal election. Trump is now the most disruptive and important political figure in Canada, and every day he makes that more clear.
For example, as the California fires raged, the president-elect talked covetously about water from Canada, claiming – erroneously – that water from Canada would have prevented the California fires. “When I was President, I demanded that this guy, the governor (of California), accept the water coming from the north, from way up in Canada,” Trump told Newsmax, likely referring to the Columbia River. “It flows down right through Los Angeles … They would have had so much water they wouldn’t have known what to do with it. You would have never had the fires.”
Like Trump’s claims about the US subsidizing Canada to the tune of $100 billion – most recently debunked by economist Jim Stanford inthis report from the Center for Future Work – this is provocative but false. The Columbia River flows through Washington state and parts of Oregon before emptying into the Pacific Ocean, but it never reaches Los Angeles. And this water issue isn’t some new thing either. In 1961, the US and Canada signed theColumbia River Treaty, a treaty that has been under renegotiation since 2018. Those 15 rounds of negotiations have never included bringing water to LA.
Still, these kinds of jabs, taunts, and threats make Trump the leading opposition figure in Canada, the person changing the direction of politics. Every leader in Canada – whether they like it or not – is now forced to run primarily against Trump, not Trudeau.
Trump wants something, but likely not a 51st state
It has been a long time since the United States got any bigger.
In the 19th century, the American governing class believed in Manifest Destiny — that the country should govern the whole continent, spreading democracy and capitalism — and the young republic acquired Alaska and much of Mexico. Recently, though, Americans have seemed happy with their territorial limits.
On Tuesday, Donald Trump signaled that this may be about to change. In a news conference at Mar-a-Lago, the soon-to-be president expressed the desire to acquire Greenland, reacquire the Panama Canal — by force, if necessary — and use “economic force” to acquire Canada.
Observers do not think he can seriously intend to absorb his northern neighbor, but it’s hard to be entirely confident.
Trump has been teasingly calling Justin Trudeau “governor” for weeks and cracking jokes about making Canada the 51st US state, but his tone on Tuesday was different. He sounded serious.
Trump referred to the Canada-US border as an “artificially drawn line” and complained about the cost of the relationship with the United States.
“We don’t need their cars,” he said. “You know, they make 20% of our cars. We don’t need that. I’d rather make them in Detroit. We don’t need their cars. We don’t need their lumber. We have massive fields of lumber. We don’t need their lumber. We don’t need their dairy products. We have more than they have.”
Trump said he would impose “very serious tariffs on Mexico and Canada,” and complained about drugs and migrants crossing both borders.
Since Trump first threatened to hit both countries with tariffs in November, Canadians have shown signs of distress. Premiers, fearing the impact on exports to the United States, have urged Ottawa to cooperate on the border, and Trudeau flew down to Mar-a-Lago to kick-start talks. Canada rushed to present a border plan. But even as they sought to placate Trump, the president-elect increased the intensity of his rhetoric.
Snowball’s chance …
After Tuesday’s news conference, Canadian leaders responded by telling Trump that Canada is not interested in joining the United States — an idea that is just not that popular.
“There isn’t a snowball’s chance in hell that Canada would become part of the United States,” Trudeau tweeted.
“Canada will never be the 51st state,” tweeted Conservative Leader Pierre Poilievre. “Period.”
“Cut the crap, Donald,” tweeted the NDP’s Jagmeet Singh. “No Canadian wants to join you.
Canadian commentators also expressed that they were shocked and appalled by Trump’s suggestion.
South of the border, though, Trump’s supporters were cheering him on. Matt Walsh, Jack Posobiec, and Jesse Waters all want to conquer Canada.
It is hard to know how seriously to take any of this.
How serious is he?
Trump’s complaints about Canada seem manufactured. Little fentanyl comes across the northern border. The $100 billion trade deficit that Trump gripes about is largely the result of oil and gas exports, which help keep US gas prices low at the pumps. If the Americans don’t want it, Canada could find other markets. Imposing tariffs would wreck the Canadian economy, but it would also damage American interests, especially if Canada imposed retaliatory tariffs on, for example, Florida orange juice.
But some well-connected people are rattled by Trump’s talk. Could he plan to wreak havoc with the Canadian economy? Will he try to divide and conquer by offering oil-rich Alberta the chance to join its biggest market, creating a Donbas on the 49th parallel? Utah GOP Sen. Mike Lee joked that the United States might like to take Alberta and leave the rest.
But it doesn’t seem like the MAGA movement would want Canada. Its left-leaning voters would make it hard for any future Republican to win the presidency. English Canadians have been struggling to accommodate prickly French Canadians since the country was founded.
What does MAGA want? So this doesn’t look like a practical proposal, and in the same news conference, Trump sounded unhinged, opining that windmills are driving whales crazy, for example.
The best-informed observers doubt that he is serious about annexing Canada.
“I think he is rattling cages so that he can expand the boundary of acceptable outcomes,” says Eurasia Group Vice Chairman Gerald Butts, who, as a senior adviser to Trudeau, negotiated with Trump. “Something like, sorry we screwed up your auto industry and dairy market, but at least you still have a country.”
“Trump’s threats against Canada seem less than serious as of now, though his comments about Panama and Greenland should not be dismissed,” says Clayton Allen, Eurasia Group’s US director. “Those are a clear effort to expand the range of potential actions and have in-built strategic benefits which Trump or those in his orbit view seriously.”
“He’s negotiating like a real estate developer negotiates,” says Jamie Tronnes, executive director of the Center for North American Prosperity and Security. “He sees a bunch of land and thinks it would be really cool to have his name on it, but I don’t think that’s going to happen.”
“Trump is softening his targets up for negotiations to come,” says Graeme Thompson, a senior analyst with Eurasia Group. “He’s obviously serious about getting concessions on trade issues and the border, and he’s very happy to continue poking where he finds weakness.”
He has found it in Ottawa. Trudeau, who announced his resignation on Monday, could not be weaker. For the next few months, most of his best people will be occupied by the race to succeed him, and then whomever they choose will likely lose an election to Conservative Leader Pierre Poilievre.
Until then, Trudeau is an unpopular lame duck. The last time Trump was president, Trudeau managed to drive a hard bargain as the two countries negotiated the Canada-United States-Mexico Agreement.
This time, Trump should have an easier time getting whatever it is he wants, and Canadians had better hope that does not include their sovereignty.
Trump, Trudeau, and the art of the deal
Donald Trump, whatever else you might say about him, has a sense of humor.
“It was a pleasure to have dinner the other night with Governor Justin Trudeau of the Great State of Canada,” he posted at midnight on Monday. “I look forward to seeing the Governor again soon so that we may continue our in depth talks on Tariffs and Trade, the results of which will be truly spectacular for all!”
Trudeau, on the other hand, is a straight man.
“I think there’s a number of folks in different countries, and I won’t point out any particular one, where folks are going to be wondering about the choice they maybe made in elections,” he said earnestly in Halifax on Monday. “Let’s not be that kind of country in Canada … Let’s not fall into an easy trap of voting for change for the worse.”
Trudeau followed that with a lament Tuesday about Kamala Harris’ defeat, which led to a nasty attack by Trump supporter Elon Musk, who predicted Trudeau — whom he called a “tool” — would soon be gone.
The Trump team has decided to make Trudeau a target for pro-wrestling-style trash talk, and Trudeau is ill-equipped to respond in kind because Canadians are rattled by Trump’s threats and have little confidence in their unpopular prime minister. Ontario Premier Doug Ford, not Trudeau, threatened to cut off energy exports to the US after Trudeau met with Canadian provincial leaders on Wednesday.
Trump has all the cards
Trudeau said it would be “a little more challenging” to deal with Trump this time than last, when they together negotiated a trade agreement, but that is an understatement.
Eight years ago, when Trump took office for the first time, Trudeau had an approval rating of 50%, the Conservative opposition was in disarray, provincial leaders were mostly cooperative, and as few as 15% of Canadians approved of Trump.
As Trump gets ready to take office again, 26% of Canadians approve of him, compared with only 23% who approve of Trudeau. Yes, you read that right: In Canada, Trump is more popular than Trudeau.
In 2016, Trudeau was seen as glamorous. Now, he is the target of derision from conservatives in Canada, the United States, and around the world, a poster boy for the kind of woke liberalism that is in retreat everywhere.
This time, Trump holds all the cards, and Trudeau is in no position to bluff.
When Trump threatened to impose 25% tariffs on Canadian (and Mexican) imports if Canada doesn’t stop migrants and drugs from crossing the border, Canadian Conservatives urged the prime minister to take action immediately, proposed kicking Mexico out of the long-standing Three Amigos trade pact — do whatever he can, immediately — to prevent Trump from wrecking the Canadian economy.
What Trump wants
This is how Trump operates, says Christopher Sands, director of the Canada Institute at the Woodrow Wilson International Center for Scholars.
“Part of his negotiating tactic is to open with a threat, underneath which comes a request,” Sands says. “And with the first term it was, ‘I’m going to tear up NAFTA.’ We all ran in circles for a while, and then it became, ‘Well, unless Canada and Mexico come to the table and agree to negotiate to fix it.’ And in the end, that was the most important part of the message.”
Trump is a New York property developer, long accustomed to theatrical public negotiations.
“My style of deal-making is quite simple and straightforward,” Trump (or his ghostwriter) wrote in his 1987 book, “The Art of the Deal.” “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after. Sometimes I settle for less than I sought, but in most cases, I still end up with what I want.”
The problem for Canadians is that it is not yet clear what Trump wants, except to dunk on Trudeau. He has said that he wants Canada to do more to stop migrants and fentanyl crossing into the United States, but the scale of the problem at the northern border is a tiny fraction of the problem facing the southern border.
Telegraphing chaos
Tyler Meredith, who was the lead economic adviser to Trudeau until last year, thinks Trump is trying to establish Canada as a problem because the northern border will be the scene of chaotic events when Trump starts deporting migrants.
“I think Canada has been pulled into that in part because he’s focused on the problem vis-à-visMexico, but he’s also thinking about it in the Canadian context because he knows that some of those people that may be deported, or who will self-deport as asylum claimants, are going to end up in Canada,” he says. “So he’s kind of saying, ‘Look, be ready, because I’m about to do this, and I don’t want to be the one blamed for it, because I’ve given you sufficient warning.’”
Meredith thinks a tighter border may not be what Trump really wants — increased defense spending and changes to the USMCA trade agreement are likely what he will get around to eventually.
That could be painful for Canada. Trump’s appointments signal anything but business as usual. Robert Lighthizer, who provided a steady hand as Trump’s trade representative last time, is out. Peter Navarro, who in 2018 said “there’s a special place in hell” for Trudeau, is in.
The Canadians will be looking to start serious talks with calm officials, like Lighthizer, but may instead find themselves dealing with more volatile people, like Navarro, who will take their cues from the trash-talking commander in chief.
Trudeau knows that his only chance of political survival hinges on managing this file properly, and it’s ultimately in Trump’s political interest to keep the trucks moving across the border, but Trump has the opportunity and, seemingly, the desire to keep bullying Trudeau until they work out a deal.
United States North? Surely, you’re joking
Donald Trump was just joking when he told Prime Minister Justin Trudeau that if Canada’s economy can’t function in the face of US tariffs, it should just become the 51st state. At least that’s what Canadian politicians on the government side are rushing to clarify.
Trump made the comment over dinner with Trudeau at Mar-a-Lago after the Canadian PM went stateside in the hopes of establishing a smooth – or smoother – working relationship with the incoming president.
Canada is desperate to avoid the 25% across-the-board tariffs Trump has promised to introduce. The tariffs would hit Canada – and the US – hard, particularly if Trudeau decides to retaliate, which he almost surely will. Cross-border trade between the two countries is worth roughly $1 trillion a year.
On LinkedIn, former Trudeau principal secretary and current Eurasia Group Vice Chairman Gerald Butts noted that this wasn’t the first time Trump had made the 51st state joke.
“Trump used this ‘51st State’ line with Trudeau a lot during his first term. He’s doing it to rattle Canadian cages,” Butts posted before offering a bit of advice.
“When someone is trying to get you to freak out, don’t. #protip”
Good advice.
Why Canadians are tired of Justin Trudeau
Ian Bremmer shares his insights on global politics this week on World In :60.
Why is Mexico's judiciary overhaul controversial?
Main reason is it means the judiciary is going to be less independent and much more politicized. They're going to be elected, these judges. They're going to have shorter terms. They're going to be aligned with whoever happens to be in political power. That is the intention. That's why AMLO, outgoing president, wanted this judiciary reform to get done and not be changed. But not only does that undermine rule of law and means that his preferences, his party's preferences will likely also be that of the judiciary. But also, especially in a country where there are very, very strong gangs associated with drugs, any place where they have strong governance, they'll be able to also ensure that the judges are the ones that they want, and that is a horrible development for rule of law in a country whose democratic institutions frankly aren't very consolidated. So, it's a problem and it's going to hurt the Mexican economy, hurt the investment climate.
After losing another parliamentary seat, is Justin Trudeau's time as Canada's leader coming to an end?
Certainly. Sometimes you stay a little longer than your performance merits. This is certainly the case for Trudeau. The people are tired of him. They don't feel the country's heading in the right direction. Major problems in terms of inflation, especially real estate, housing costs, lack of availability of housing, and just people wanting something different. We've seen that all over the world with elections over the last year. We're going to see it in Canada in the coming months.
2.5 years in, and 1 million now dead or injured. Is Russia's invasion of Ukraine any closer to resolution?
I'd say it's closer to resolution insofar as the Ukrainians increasingly know that it's getting harder for them to field troops, to fight, to defend their territory. That's why the risk, the risky attack inside Russian territory, which they probably can't hold, but certainly has meant that they're going to lose more territory in Ukraine. Also, certainly you talk to NATO leaders, they understand that the time for negotiations, the time for trying to wrap up the war and freeze the conflict, a ceasefire, at least, if not a negotiated settlement is soon. So, I'd be surprised if the war is still going with the level of intensity in a year as it is right now, but the Ukrainians are not going to get their land back. And what that means and what kind of guarantees they get from the West, including security guarantees potentially, certainly Ukraine very hopeful for an actual formal NATO invitation, which they don't have at this point. That is the state of negotiations happening between the Ukrainians and others.
Pierre Poilievre speaks after being elected as the new leader of Canada's Conservative Party in Ottawa, Ontario, Canada, September 10, 2022.
Lines drawn on Canadian tax fight
Canadian Conservative leader Pierre Poilievre finally showed his cards on the controversial question of capital gains taxes, voting against proposed hikes and promising to cut taxes if he takes power.
The Liberals proposed the increase in capital gains taxes – which apply when Canadians sell stocks or other investment assets such as vacation properties – this spring to help offset billions in spending on housing and social support.
Trailing in the polls but still hoping to win among younger voters, the Liberals framed it as a matter of generational fairness.
Despite Polievre’s opposition, the measure — worth an estimated $19.4 billion over five years — passed easily and will soon become law.
But the vote, which came just as MPs were set to head back to their communities for the summer, sets up an ongoing war of words over the measure, with Liberals stressing economic fairness and Conservatives arguing that Liberal taxes are killing the economy.
Former Canadian Prime Minister Brian Mulroney reacts to a standing ovation at the Canadian Club in Ottawa, Canada, on Sept. 14, 2007.
Mulroney’s passing sparks an outpouring of grief in Canada and US
Americans don’t pay much attention to Canadian politics for the simple reason that they are a less exciting version of what is going on in the US – with added snow.
However, the passing of former Prime Minister Brian Mulroney at the age of 84 has prompted a flood of glowing obituary articles in many American media outlets. Politico’s headline referred to Canada losing its “Washington Whisperer” – a man who gave eulogies for not one, but two former US presidents – Ronald Reagan and George H.W. Bush.
In 2004, at Reagan’s state funeral, Mulroney said the late president possessed a “rare and prized gift called leadership.” At Bush’s funeral in 2018, he said every head of government who dealt with the former president knew they were dealing with “a gentleman, a genuine leader, one who was distinguished, resolute and brave.”
Canada’s 18th prime minister spent much of his time in office strengthening the ties with the US, efforts that culminated in the Canada-U.S. free trade agreement (which later broadened to include Mexico as the North American Free Trade Agreement).
Mulroney became a valued friend of Reagan, with the two men of Irish heritage singing “When Irish Eyes Are Smiling” with their wives at a 1985 meeting in Quebec City, which became known as “the Shamrock Summit.”
Mulroney’s popularity did not always prosper domestically because of his friendships. He was succeeded by Liberal Prime Minister Jean Chrétien, who was once caught on a hot microphone telling Belgium’s prime minister that he liked to stand up to the Americans: “It’s popular … people like it, but you have to be careful because they’re our friends.”
Mulroney had no truck with such posturing and would reap the rewards of his close relationships by being able to speak frankly to his US counterparts at crucial moments.
During free trade negotiations, the clock was ticking down on a deadline, with Canada’s red line issue – an independent dispute resolution mechanism – still unresolved. Mulroney called Reagan and asked how the US had been able to strike a nuclear arms reduction deal with the Soviets yet could not get a free trade deal with their best friend over the line. Reagan subsequently instructed his negotiating team that the dispute resolution mechanism had to be included.
When George H.W. Bush politely told Mulroney that the Europeans were tired of Canada speaking up on the future of Europe, Mulroney’s notes of the call revealed he told Bush: “Tell the Europeans we’re not renting our seat in Europe. Tell them to go to the graveyards in France, Italy, and Belgium. We’ve paid for our seat.” Bush was so moved by the response he referred to it in his memoir.
After he introduced a national sales tax in 1991, Mulroney’s approval rating plummeted. “Popularity is bad for you. I try to avoid it like the plague, and I’ve been reasonably successful,” he joked.
Yet, his political opponents kept the tax in place, and it now yields a tenth of all revenues.
Former President George W. Bush issued his own tribute to Mulroney last week, saying he was “a great man … smart, charming, funny and kind.”
Anthony Wilson-Smith covered Mulroney for many years as a reporter and wrote a touching tribute in Canada’s Policy magazine. “Mulroney was most beloved and trusted by those who knew him best,” he said, feelings that reflected his regular acts of “quiet kindness.”
Mulroney will be laid to rest in Montreal on March 23, and it is expected that some senior American public figures will attend.
He was a consequential, transformative leader, as the outpouring of appreciation on both sides of the border shows.
FILE PHOTO: Andres Manuel Lopez Obrador (left), President of Mexico, and Justin Trudeau (right), Prime Minister of Canada, are delivering a message to the media at the National Palace in Mexico City,on January 10, 2023, on the occasion of their meeting with Joe Biden, President of the United States, at the 10th North American Leaders' Summit, where they are discussing migration, economic and drug trafficking issues.
Will Trudeau bring back visas for Mexican visitors?
Justin Trudeausaid last week that Canada is in talks with Mexico to try to find ways to cut down on the number of asylum-seekers flying into Canada with the help of organized criminal groups.
Trudeau is under pressure from the Conservatives, and the Americans to reinstate a visa requirement on Mexican travelers, which his government lifted in 2016. The government said last month it is considering doing so.
The Biden administration would also like the visas to return because the number of migrants crossing the northern border has spiked in the past year — 2,200 interceptions in 2023, up 240% from 2022. Most of the crossings are made in the lightly patrolled areas of upstate New York, New Hampshire, and Vermont.
The route via Canada to the US is appealing to Mexicans and other Latin Americans who face detention and deportation at the more heavily patrolled southern border. A network of human smugglers has sprung up to facilitate the crossings, but would-be migrants face danger in the cold northern woods.
The Liberal government seems to be signaling that it’s working with Mexico rather than moving immediately to require Mexican visitors to apply for visas, which would be a setback for the trade and diplomatic relationship.