Donald Trump wants to annex Canada to gain access to its critical minerals, Trudeau says

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Justin Trudeau told an economic summit Friday that he believes Donald Trump is sincere in his desire to annex Canada, in part to gain access to its critical minerals, revealing how the U.S. President in their most recent conversation suggested the Prime Minister familiarize himself with a 1908 treaty that set the boundaries between the two countries.

The Prime Minister’s remarks were made behind closed doors, but The Globe and Mail spoke to four sources who confirmed what he said. The Globe is not identifying the sources because they were not authorized to speak publicly about the matter.

His comments represent the most frank acknowledgment that what the federal government once dismissed as a joke – Mr. Trump’s talk of making Canada the 51s state – is now regarded by the Prime Minister’s Office as a genuine interest on the part of the U.S. President.

Mr. Trudeau made his assessment to an audience of about 200 business leaders, trade experts and union executives in Toronto who had gathered to map out ways to boost economic growth and attract new capital investment in the face of the looming threat of U.S. protectionism. He talked about two phone conversations he had with Mr. Trump on Monday before the President agreed to delay steep tariffs on Canadian goods for 30 days.

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During the calls, the Prime Minister recalled, Mr. Trump referred to a four-page memo that included a list of grievances he had with Canadian trade and commercial rules including the President’s false claim that U.S. banks are unable to operate in Canada. Other complaints included Canada’s sheltered dairy industry which is protected from foreign competition by a wall of tariffs, as well as the federal goods and services tax.

In the second conversation with Mr. Trump on Monday, the Prime Minister told the summit, the President asked him whether he was familiar with the Treaty of 1908, a pact between the United States and Britain that defined the border between the United States and Canada. He told Mr. Trudeau he should look it up.

Mr. Trudeau told the summit he thought this treaty had been superseded by other developments such as the repatriation of the Canadian Constitution – in other words, that the border cannot be dissolved by repealing that treaty. He told the audience that international law would prevent the dissolution of the 1908 Treaty from leading to the erasure of the border. For example, various international laws define sovereign borders, including the United Nations Charter of which both countries are signatories and which has protections for territorial integrity.

A source familiar with the calls said Mr. Trump’s reference to the 1908 Treaty was taken an as implied threat. Soon after winning the 2024 presidential election, Mr. Trump began talking about making Canada the 51st state and suggesting Canadians could avoid his tariff threats by agreeing to a political union. The Trudeau cabinet at the time shrugged off the comments. In early January, however, Mr. Trump expanded on his proposal, publicly referred to the U.S.-Canada border as “an artificially drawn line” and said he would be willing to use “economic force” to coerce Canada into being annexed.

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Canadian officials have been unable to determine the architect of the memo, the Prime Minister told the summit. Mr. Trudeau said that his team spoke with U.S. commerce secretary nominee Howard Lutnick, Secretary of State Marco Rubio and two other officials that should have been involved in crafting the four-page memo Mr. Trump read from, but they were unaware of the document or its contents.

Asked at the summit about Mr. Trudeau’s interpretation of Mr. Trump’s motives, Employment Minister Steven MacKinnon said the sense he got from the gathering and those assembled is that “Canada is free, Canada is sovereign and Canada will choose its own destiny, thank you very much.”

Transport Minister Anita Anand said Canadians are united in rejecting annexation. “There will be no messing with the 49th parallel,” she said, a reference to the Canada-U.S. border.

Beth Burke, CEO of the Canadian American Business Council, said Americans do not take seriously Mr. Trump’s talk of taking over Canada. She said people in the United States view the President’s persistent mention of annexation as a “position of negotiation and posturing and using it as leverage in the conversation.”

She said Canada can use access to its abundant critical minerals as leverage in coming renegotiations of the United States-Mexico-Canada Agreement, which is due for renewal in 2026.

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Earlier at the gathering, Mr. Trudeau had pleaded with provinces and territories to dismantle internal barriers that discourage greater east-west trade inside Canada.

Innovation Minister François-Philippe Champagne said Mr. Trump’s decision to levy steep tariffs on Canada – now delayed after a last-minute deal Monday – is a “wake-up call” for the country.

The prospect of much more difficult relations with the United States must drive Canada to find other means of attracting business investment, of generating economic growth and diversifying trade beyond American customers, he said.

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Mr. Trudeau said a good start would be looking at interprovincial trade barriers put in place by provincial governments that make it easier for Canadians to trade with the United States rather than other provinces and territories.

“It’s about time we had genuine free trade within Canada,” Mr. Trudeau told the summit.

He said many of these barriers, which hinder the movement of goods and workers within the country, make no sense. The Prime Minister cited recognizing teaching certifications and tire requirements for trucks as two examples. This will make it easier for Canadians to do business “across Canada, east-west and not just north-south.”

A 2019 paper published by the International Monetary Fund found that Canada’s internal trade barriers – excluding those related to geography, such as challenges with transporting goods across a country this large – were equivalent to an average tariff of 21 per cent in 2015. The study found that lifting all internal barriers would result in 4-per-cent growth in Canada’s real gross domestic product per capita.

Mr. Champagne said the most important task right now for Canada is restoring business confidence.

This meeting of business and labour leaders at Toronto’s Evergreen Brick Works takes place just days after a potential shock to the Canadian economy was averted – one that threatened to shutter businesses and cost jobs. Earlier this week, Mr. Trump held off imposing steep tariffs on Canadian imports – a potentially devastating shock that drew fresh attention to Canada’s reliance on the U.S. market. More than 75 per cent of this country’s merchandise exports go to the United States.

Mr. Champagne said the Trump tariff threat must force Canada to act quickly to safeguard its economic fortunes and standard of living.

“The rules have changed, and so Canadians understand that we need to bring our resources to market. We need to diversify our economy. This is our moment as Canada,” Mr. Champagne said. “We make sure that we build what needs to be done here in this country to succeed and to prosper.”

Rising U.S. protectionism is damaging business investment in Canada, business leaders say.

One of Mr. Trump’s goals in threatening tariffs on allies, Canadian officials have repeatedly said, is to force investors to relocate manufacturing to the United States – at the expense of America’s trading partners. In addition, Mr. Trump has vowed to cut taxes and regulations, measures that could make the U.S. a more attractive market for businesses.

Other protectionist threats from the Republican White House include talk of more tariffs on steel, aluminum and copper. And by April 1, U.S. government departments and agencies are supposed to report to the White House on the country’s trade deficits with major trading partners and recommend measures to rebalance.

On Monday, Mr. Trump delayed tariffs of 10 per cent on Canadian energy and critical minerals and 25 per cent on the rest of Canadian goods for 30 days after Ottawa agreed to more measures to fight organized crime and the illegal production and distribution of fentanyl.

Progressive Conservative Leader Doug Ford, who is campaigning for re-election as Ontario Premier, criticized the federal economic summit as a waste of time on Friday and urged Ottawa to tighten up the border to stop the flow of drugs on both sides. He suggested former chief of the defence staff Rick Hillier as an option for border czar. His office later clarified that Mr. Ford meant fentanyl czar, a position Mr. Trudeau said would soon be created.

“A message to the federal government: enough’s enough. I don’t need to be in a room looking at the people I’ve talked to a thousand times and coming up with this idea. You know what the Trump administration wants? They’ve been very very clear. They’ve been clear to me, they’ve been clear to everywhere in North America. They need to tighten up the border,” Mr. Ford said at a campaign stop in Scarborough.