Morning Update: What Canada’s power can be

Good morning. Canada can defend its economic sovereignty but it will need to act fast. More on that below, along with updates from the federal election campaign and tax tips.

Today’s headlines

• Trump announces a 90-day pause on steep global tariffs, but hikes China levy to 125%
• Canada will not be subject to blanket 10-per-cent U.S. duty on most imports, envoy Kirsten Hillman says
• Pierre Poilievre vows to use the American “three strikes you’re out” plan for repeat offenders, reviving a failed Harper proposal
• The Liberal candidate that Mark Carney chose to replace Paul Chiang, who quit the race, is a member of a Beijing-friendly lobby organization

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Economy

How to awaken Canada’s sleeping giant

I’m Adam Radwanski, a columnist and feature writer for Report on Business. I’ve spent the past few years covering climate policy, but I’m currently broadening my focus to explore opportunities and challenges around boosting Canada’s economic sovereignty.

My feature this past weekend was a start to that effort.

The premise: Canada has a wide range of strengths that could make us more of a global economic power, if we leveraged them better.

I developed a list of 10 building blocks, for which whoever is in power after the federal election should work swiftly to develop actionable strategies.

I included our bountiful natural resources; agricultural industries; highly skilled manufacturing work force; coastal access to most major markets; climate-friendly power (including a resurgent nuclear industry); clean-tech; increasingly empowered Indigenous communities; world-leading institutional investors; attraction to talented immigrants; and pioneering artificial-intelligence research. And that wasn’t even exhaustive.

But we’ll need to break some bad habits: complacency from overreliance on the U.S., for example. Ottawa will need to be nimble and move quickly on multiple fronts. We can’t fall prey to internal squabbling.

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I included specific suggestions from sectoral leaders or experts, and I’d encourage you to read the full story if you haven’t already. But I also see a few broader takeaways:

We need comprehensive strategies, not silver bullets.

Beware any impressions from the federal election campaign that, say, getting rid of a single piece of regulatory legislation would unlock tons of energy projects. In reality, that might require everything from close federal-provincial work to expedite processes, to tweaks to investment incentives, to helping more Indigenous communities be active partners or leaders.

It’s similar apropos getting more Canadian crops to foreign markets (necessitating attention to agricultural modernization, trade infrastructure and relationship building); helping auto-parts makers pivot from the U.S. market (capital supports, retraining, procurement); and pretty much everything else. To borrow from The Wire: All the pieces matter.

Government will have to spend.

Yes, regulatory reforms and other ways of making it easier to do business are part of the equation. But in most areas I looked at, there’s a need for direct government spending, or subsidies and financing to attract private investment.

The latter need is especially pronounced because of the extraordinarily tumultuous economic circumstances caused by Donald Trump’s trade wars. It wasn’t easy before to get Canadian businesses to make capital investments to boost long-term competitiveness; it’s all the harder now that they’re just trying to get through each day.

We need to get better at prioritization.

Particularly given spending needs, government and the private sector have to pick some lanes.

That was a theme of my story, in terms of identifying areas where Canada has a competitive advantage. But even within those, there’s a need to avoid spending indiscriminately or spreading too thinly.

For example, as ports and other entities seek government backing for new projects to improve trade infrastructure, a clear process to determine which investments are most urgent would really help.

We need to work with existing mechanisms.

Whoever wins the election, we’ll effectively have a new Prime Minister. That brings the temptation to get rid of or replace whatever didn’t work perfectly under the previous PM, which could just slow things down.

My favourite example is the Canada Infrastructure Bank, which notoriously had a slow start, contributing to the Conservatives pledging to get rid of it. Now it’s finally started to become effective at using loans to get projects built, which will need to be done one way or another. So tweaking its mandate to address current priorities would make more sense that restarting from scratch.

We don’t have the luxury of obsessing over missed opportunities.

There’s a danger in hindsight about what could’ve been done causing us to lack foresight now.

That arguably applies to campaign talk of reviving the Energy East oil pipeline, which no company is even proposing to build right now, potentially at the expense of focusing on other projects.

Perhaps AI is a less contentious example. As suggested to me for this story, it’s probably too late for Canada to jump back to the forefront of commercializing the base technologies. So, it might be better to try to take a lead in scaling usage, particularly in sectors – like mining, or certain types of manufacturing – where it intersects with our other strengths.

One last thought from me

You can draw your own conclusions about other lessons. But for me, those are some of the ones that will inform my reporting and analysis as I try to dig deeper into economic nation-building priorities for the next government. Stay tuned, we’ll be diving deeper into this topic over the coming months.

Election 2025

‘We’re in a crisis right now.’

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As part of our East to West series, reporters return to their hometowns to learn how the campaign is playing on the ground. Gary Mason goes to Sarnia, a border town where Trump looms over voters’ worries leading up to election day.

Read more:

• Platforms: Parties are using the Parliamentary Budget Officer to help cost out their election promises but have not pledged to release platforms before the debates.
• Health: The financial toll of living with diabetes underscores why the push for medical coverage isn’t an abstract political idea; for millions, it’s personal
• Catch up: What happened on Day 18 of the campaign

The Wrap

What else we’re following

At home: Ontario is open to a compromise with Toronto on plans to remove three bicycle lanes, the Transportation Minister’s office said.

Abroad: German parties agree to form a new government after months of political drift and weeks of negotiations.

A first: Female athletes will be in the majority at an Olympics for the first time at the 2028 Los Angeles Summer Games thanks to a big win for women’s soccer.

Two shows: From The Pitt to Pulse, Canadian showrunners are giving Americans a taste of their own medicine.

Three things: Understand the taxman’s view of failing to report gig income.