Just two weeks after the U.S. election, members of Parliament from all parties unanimously backed a motion to invite president-elect Joe Biden and vice-president-elect Kamala Harris to address Parliament at the earliest safe opportunity to do so. In the words of the motion’s mover, NDP MP Peter Julian, the reason for the invitation is “in recognition of the extraordinary relationship between Canada and the United States.” What a difference an election makes.
The enthusiasm to mend the Canada-U.S. relationship in 2021 is both understandable, as well as responsible statecraft for Canada given that the U.S. and Canada enjoy the world’s largest and most comprehensive trading relationship in the world, valued at more than $1.6 trillion bilaterally and supports roughly one in five Canadian jobs.
Add to that, the fact that according to all public opinion research, a strong majority of Canadians are enthused to see the end of the Donald Trump presidency and all of its drama, trauma, dysfunction, incompetence and chronic indecency.
But, before anyone gets too enthusiastically inebriated with the incoming administration, challenges to the Canada-U.S. relationship are significant and require effective management by Canada.
Consider that Biden, during the Democratic party primaries, made a clear commitment to the hard left of his party that, if elected, he will cancel the Keystone XL pipeline, which is expected to carry 830,000 barrels of Canadian oil per day to the U.S. This promise, if kept, would be awful for Canada’s economic recovery and devastating to the future of Alberta’s energy industry and workers.
On trade more broadly, Canadians won’t have to be concerned about a reopening or abrogation of the Canada-United States-Mexico Agreement that came into force in July. However, what will be of deep concern is Biden’s recent promise to actualize a deeper “Buy America” push across the U.S. government, going so far as to say: “From autos to our stockpiles, we’re going to buy American.… No government contracts will be given to companies that don’t make their products here in America.”
While one can excuse excessive campaign rhetoric, the blunt language and scale of threat to Canadian goods and services, exporters to the United States should be deeply worried about how consequential such a policy enacted would be. Particularly if, as it seems the case, that the Republican party can no longer be counted on to be an even occasional adherent to the free trade principles of their alleged hero, Ronald Reagan.
On immigration, for over a decade Canada has set the bar high and succeeded in pursuing skilled new immigrants to Canada. Joe Biden’s election will result in a significant American policy shift on immigration as he has signalled plans to expand the number of high-skilled worker visas granted into the U.S. Canada needs to compete for and expand its immigration intake of skilled new Canadians. Without question, this will be increasingly difficult in the years ahead.
On climate change, the new administration will sign on to the Paris Climate Agreement. What is less clear is what, exactly, President Biden and a (likely) Republican controlled Senate and Democratic controlled House of Representatives will agree on in terms of meeting the agreement’s goal of an immediate and dramatic reduction in greenhouse gas emissions.
So, while Canada will be pursuing a recently announced steep escalator of carbon pricing up to $170 a tonne by the end of this decade, it is highly unlikely that our largest trading partner and economic competitor and investment attraction competitor will be doing anything remotely of the sort.
To put a finer point on it, while Prime Minister Justin Trudeau has promised to increase the price of gas at the pump by at least $0.37.6 a litre, this new cost to consumers and business and to production will not be mirrored by America and will undoubtedly put Canada at a clear competitive disadvantage.
Elections matter – this has always been true. The election of Joe Biden as President of the United States ends the disruptive and ugly chapter of the belligerent Trump presidency. But what is equally true is that the challenges of the Canada-U.S. relationship in 2021 and beyond are substantive and diverse and require the soundest of policy, political and diplomatic minds to navigate for Canada’s best interest. •
James Moore is a senior business adviser at Dentons Canada LLP and a former federal minister of industry.
