KINSELLA: Ontario and Quebec to be hit hard if Canada fails to reach trade deal with U.S.
· Toronto Sun
What happens if there’s no deal?
The deadline is Wednesday. For weeks, Intergovernmental Affairs Minister Dominic LeBlanc has essentially become a citizen of Washington, D.C. So too Chief Negotiator Janice Charette.
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Canada’s most-senior representatives in the Canada-U.S. have endured countless meetings with U.S. Trade Representative Jamieson Greer that have gone precisely nowhere. No deal.
Similarly, Prime Minister Mark Carney has endured myriad phone calls with U.S. President Donald Trump that have been a waste of time. Trump continues to refer to Carney as “Governor.” He still calls Canada the “51st state.” We still get threatened by the MAGA Republicans and Trump.
So, as of this writing, there is no deal. Both Canada and the U.S. are saying – at least publicly – that the two countries are too far apart.
What if no deal is reached?
What happens, then, if there is no deal for real?
For Canada, plenty will happen, none of it good. For the United States, comparatively less harm – but still some harm.
Canada’s greatest vulnerabilities are autos, steel, aluminum, copper and lumber. Those sectors employ an estimated quarter of a million Canadians directly, and hundreds of thousands more indirectly. Ontario is home to the vast majority of those jobs, with Quebec coming a strong second.
While failure to achieve an agreement won’t hit those five sectors immediately, other Canadian sectors will feel the pain right away. They are dairy, alcohol and a broad list of other types of goods. There, hundreds of thousands of jobs – direct and secondary – are at immediate risk.
Once again, the vast majority of dairy jobs are found in Ontario and Quebec. For the alcohol and brewing sectors, the employment is more spread out: Nova Scotia, Quebec, New Brunswick, British Columbia and Ontario. Ontario has the most breweries, followed by B.C and Quebec.
The bottom line for dairy, alcohol and “other?” Close to $30 billion in potential losses, which amounts to about 5% of all of Canada’s annual exports to the U.S. For autos, steel, aluminum, copper and lumber: close to $60 billion, a huge blow to our economy.
Douglas Porter, who is BMO’s chief economist for capital markets, estimated Trump’s new threatened 50% tariffs – which he announced last month – could cost the Canadian economy a minimum of 50,000 jobs, with the worst case scenario being 100,000.
That is, not just harm those key economic sectors – loss of those jobs.
Immediate pain in Ontario and Quebec
The pain would be deep and immediate in Ontario and Quebec. Both provinces are very dependent on manufacturing. Nearly 20% of all workers in Ontario and Quebec are employed in manufacturing jobs – but about seven to 10% in other provinces. That is many, many households losing all, or a big part, of what they need to put bread on the table and keep the lights on.
Are Canadians aware that we are sliding ever-closer to the edge of a cliff? They are, and they are (for now) defiant. Abacus found almost 70% of Canadians felt Carney and Team “should hold firm – even if that means the uncertainty last longer.” Just one in five wanted compromises to make a deal now.
Those results help to explain why Mark Carney won last year’s election, and why he has continued to hold onto Canadians’ confidence. For more than a year, he has been the only political option promising to “hold firm” against trump.
Tellingly, Conservative Leader Pierre Poilievre is now doing likewise, demanding Carney make no new concessions to Trump. It will be interesting to see if the Tory leader starts to get some credit from voters for that big change in message.
But there is a warning for Carney in the numbers, too. The Angus Reid Institute found that 62% of us want Carney to be tough and respond with counter-tariffs. But, in recent weeks, Canadians’ confidence in Carney has slipped significantly – over half of respondents felt Carney could deliver a good deal back in the Spring. Now, only about 4% feel that way.
With so many jobs at stake, with so much damage to the national economy growing closer, what should we do?
The answer, as usual, lies with Donald Trump. Even if we reach a deal with the U.S. President, no one will be surprised if he tears it up in the days that follow. It has happened many times before.
Keep trying? Sure. But Mark Carney needed to prepare Canadians for economic calamity, too.
And he hasn’t done that.